Ringgit drops 235 bps against US dollar on Fed’s interest rate expectations

17 Jun 2021 / 19:11 H.

KUALA LUMPUR: The ringgit further weakened against the US dollar at the close today as the greenback rose sharply after the US Federal Reserve (Fed) brought forward the interest rate expectations.

At 6 pm, the local note dropped 235 basis points to 4.1390/1400 versus the US dollar, from 4.1155/1180 at Wednesday’s close.

OANDA senior market analyst Jeffrey Halley said the overnight US dollar rally has also left many of the major currencies at interesting levels with the potential for more downside ahead.

“Overall, the moves in currency markets overnight look ominous unless you are bullish on US dollar.

“However, we need to see today’s reaction from Europe and the US to confirm whether we are witnessing a medium-term shift in the US dollar outlook post-Federal Open Market Committee (FOMC) meeting.

“The year 2020/2021 has been notable for its many false dawns, and I would not yet discount that possibility,“ said Halley in a note.

In the homefront, the daily vaccination tally of the National Covid-19 Immunisation Programme showed a positive trend as it continued to surpass the target of 200,000 doses per day, with a further 204,839 doses administered yesterday.

“We hope this could continue to help support the ringgit and local sentiments moving forward along with expectation of a better trade performance and foreign direct investments in the second quarter which is expected soon,” an analyst told Bernama.

At the close, the ringgit was firmer against a basket of major currencies.

The local unit was better against the Singapore dollar at 3.0918/0930 versus 3.1032/1053 on Wednesday’s close and improved vis-a-vis the yen to 3.7389/7402 from 3.7431/7453.

It rose against the pound to 5.7826/7840 from 5.8090/8126 yesterday and strengthened against the euro to 4.9465/9477 from 4.9896/9927 previously. — Bernama

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