Ringgit Slightly Weak, USD Strengthens As Rate Cut Narrative Gets 'Bland'


The ringgit opened weaker against the US dollar on Friday amid increased bets that the US will further delay its interest rate cuts.

At 9am this morning, the ringgit fell slightly to 4.7350 against the USD from Wednesday's close of 4.7320.

According to the Chief Economist of Bank Muamalat Malaysia Bhd, Dr Mohd Afzanizam Abdul Rashid said the foreign exchange market (forex) showed an advantage for the US dollar rising high with the US Dollar Index (DXY) strengthening by 0.19% to 104,546 points.

It shows the market situation is more confident that there is a soft landing in the US economy based on the latest data.

He said again, even though the Fed Funds Rate has reached its peak. The Fed will not change its course later because they believe the inflation rate is still high and the economy is moving stably.

For now, US economic data points remain firm with fourth quarter 2023 estimates higher than expected at 3.4% quarter-on-quarter seasonally adjusted annual rate versus the market's 3.2%.

US Fed Governor Christopher Waller reported that they are in no rush to start easing monetary policy. He emphasized that recent economic data warrants delaying or reducing the amount of cuts this year.

In fact, the strengthening economy and robust employment are further indications for the Fed to gain confidence that inflation is on a sustainable path towards the 2% target.

Meanwhile, the local unit depreciated against the British pound to 5.9775/9850 from 5.9742/9805 and eased against the Japanese yen at 3.1287/1329 from 3.1261/1298 on Wednesday.

The ringgit traded mixed against Asean currencies.

It rose against the Thai baht to 12.9815/13.0058 from 12.9925/13.0130 and was also higher against the Singapore dollar at 3.5079/5129 from 3.5112/5151 previously.

It was almost unchanged against the Philippine peso, trading at 8.41/8.42 from 8.41/8.43 on Wednesday and lower against the Indonesian rupiah at 298.5/299.1 from 298.3/298.8 previously.