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Tuesday, September 22nd, 2020

Expectations of US rate rise hang over ringgit

by November 14, 2016 General

KUALA LUMPUR, Nov 14 — The ringgit closed lower against the US dollar today, dragged down by expectations of an interest rate hike by the US Federal Reserve next month, dealers said.

At 6 pm, the local unit’s onshore trading was at 4.3250/3350 against the greenback from 4.2800/2900 on Friday.

FXTM Research Analyst Lukman Otunuga said the dollar’s resurgence amid the revived US rate hike expectations played a part in the ringgit selloff as bears installed repeated rounds of selling.

He also said the ringgit plunged to its weakest level in more than 12 years as concerns mounted over Trump’s presidency having a negative impact on trade across Asia.

“Financial markets have been clearly Trump-driven, with more time needed for investors to fully digest and weigh the impacts of a Trump presidential victory,” said Otunuga in a statement.

On the local front, he said economists will be looking towards the latest inflation report from Malaysia in the coming weeks which should provide further clarity on the health of the Malaysian economy.

Bank Negara Malaysia said it is taking measures to reinforce existing rules that have in been in place to prohibit facilitation of ringgit non-deliverable forward (NDF).

“The ringgit remains a non-internationalised currency. Thus, any offshore trading such as ringgit NDF is not recognised,” it said in a statement yesterday.

The local unit was traded mixed against other major currencies.

It went down against the Singapore dollar to 3.0548/0632 from 3.0372/0458 on Friday, but rose against the British pound to 5.3972/3114 from 5.4168/4299 previously.

The ringgit rose against the yen to 4.0087/0210 from Friday’s 4.0199/0308.

It eased against the euro to 4.6520/6636 from 4.6519/6632 previously. — Bernama