The ringgit maintained its momentum when it opened stronger against the United States (US) dollar on Tuesday, boosted by expectations that the Fed will cut interest rates further in the near future.
At 10.25 am, the ringgit was trading lower at 4.1530 which is a difference of 0.78% since it opened against the USD from 4.1210 at yesterday's close.
Bank Muamalat Malaysia Bhd Chief Economist, Dr Afzanizam said Fed Chairman Jerome Powell's latest statement clearly shows that the Central Bank of developed countries is committed to further reducing interest rates gradually and towards a more neutral stance.
He also said that this development should be positive for the ringgit because the difference in interest rates between the Fed Funds Rate and the Overnight Policy Rate (OPR) will narrow further in the future while making Malaysia's investment returns look more attractive.
In the meantime, the ringgit was also traded strengthening compared to the main currency group.
These included gains against the Japanese yen to 2.8655/8709 compared to 2.8899/8936 at Monday's close, gains against the euro to 4.5876/5960 from 4.6106/6162 and higher against the British pound to 5.5109/5209 from 5.5193/5260 yesterday.
The ringgit also performed better against Asean currencies, rising against the Singapore dollar to 3.2057/2118 from 3.2175/2217 and strengthening to 12.7082/7420 from 12.8037/8248 against the Thai baht.
In addition, the ringgit also rose against the Indonesian rupiah to 272.0/272.7 from 272.1/272.6 yesterday and remained unchanged against the Philippine peso to 7.34/7.37 from 7.35/7.37. – Bernama
