THE ringgit weakened against the US dollar today in line with Asian foreign-exchange (forex) markets after the greenback rose as the US Federal Reserve (Fed) was perceived to be more hawkish than expected.

At 6pm, the local note was traded at 4.4110/4200 versus the US dollar, compared to 4.3900/3955 at the close yesterday.

Although the Fed did deliver a 50 basis points rate hike as expected, Fed chief Jerome Powell, in his post-meeting comments was reported to have disappointed many who expected further slowdown in pace of policy tightening, in improved environment on encouraging inflation reports. 

The Fed raised its benchmark rate by 50 basis points to the 4.25%-4.5% target range yesterday and indicated that it would deliver more interest rate hikes next year even as the economy slips towards a possible recession. 

“Besides, local forex traders also took note of the weaker China retail sales data and the surge in Covid-19 cases in Beijing. 

“This news is deemed slightly negative for the ringgit, although arguably the weaker China data was not a surprise nor was the surge in Covid-19 cases,” SPI Asset Management MD Stephen Innes told Bernama. 

Meanwhile, oil prices which have a close correlation with the ringgit, also dropped as the hawkish signal from the Fed brewed uncertainty over the health of the US economy, which spurred some profit-taking. 

Benchmark Brent crude eased 0.28% to US$82.47 (RM363.69) per barrel as at the time of writing. 

Against a basket of major currencies, the ringgit was traded mixed.

The local note was marginally better against the British pound to 5.4410/4521 from 5.4440/4509 at Wednesday’s close and rose versus the Singapore dollar to 3.2554/2625 from 3.2627/2675 previously. 

It eased versus the euro to 4.6845/6940 from 4.6819/6878 but gained against the Japanese yen to 3.2296/2364 from 3.2552/2608 yesterday. – Bernama / graphic TMR