The Ringgit's Rise: Anticipating FOMC's Impact
Kuala Lumpur, Malaysia: The ringgit started the day with a surge in value against the US dollar, riding the wave of positive momentum from last week. This surge comes as the greenback weakens in anticipation of the two-day Federal Open Market Committee (FOMC) meeting, which begins tomorrow. At 8 am, the local currency traded at 4.1035/1245 against the greenback, a significant improvement from its closing rate of 4.1105/1140 on Friday.
Bank Muamalat Malaysia Bhd's chief economist, Mohd Afzanizam Abdul Rashid, explains that traders and investors are expecting a 25 basis points cut from the US central bank. This move is aimed at boosting growth, despite signs of a weakening outlook. As a result, the ringgit is expected to remain well-supported, with the US dollar-ringgit exchange likely to range between RM4.11 and RM4.12.
The ringgit's strength continued as it hit its highest level in four years and five months last Thursday, trading at 4.1115/1165 versus the greenback. This surpasses the previous high of 4.1155, which was recorded on June 16, 2021. The currency also strengthened against major currencies, including the British pound, euro, and Japanese yen.
In the ASEAN market, the ringgit performed well against most currencies. It gained against the Singapore dollar, rising from 3.1741/1773 to 3.1663/1827, and was slightly higher against the Philippine peso, moving from 6.97/6.98 to 6.96/7.00. However, it remained almost unchanged against the Indonesian rupiah, trading at 246.4/247.8, similar to its previous rate of 246.8/247.2.
