Ringgit continues to slide against US dollar in early trade

If the Fed increases the interest rate as per expectation, the greenback will most likely fall

THE ringgit opened lower against the US dollar for the fifth consecutive day today as investors paid close attention to the US Federal Reserve (Fed) decision later today, dealers said.

At 9am, the local currency fell to 4.7420/7450 against the greenback from yesterday’s close of 4.7345/7375.

ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar was once again rising against the ringgit ahead of the US interest rate decision today.

“The Fed is expected to raise interest rates by 0.75%. If that hike materialises, it will be the fourth consecutive increase of that size. A rise in line with expectations would likely see the dollar fall at first, as the market has already widely priced in this increase.

“But investors will pay close attention to the Fed’s statements at the press conference following the announcement of the decision, which should set the tone for future monetary policy steps,” he said. 

Diniz said some experts were already forecasting a slowdown in the pace of hikes from as early as December, which might mean the Fed would raise interest rates by just 0.5% at the next meeting. 

He added that investors should also pay attention to the Malaysian interest rate decision to be released tomorrow. 

Bank Negara Malaysia is projected to raise the Overnight Policy Rate from 2.5% to 2.75%, a much smaller increase than the one expected in the US.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies, except the Japanese yen. 

The local note appreciated against the euro to 4.6879/6909 from 4.7033/7062 from yesterday’s close, improved vis-a-vis the Singapore dollar to 3.3536/3562 from 3.3571/3595, and went up versus the British pound to 5.4547/4582 from 5.4608/4642.

However, it dropped against the Japanese yen at 3.2202/2224 from 3.2107/2130 yesterday. — Bernama / pic TMR FILE