Ringgit strengthens against dollar after US Fed’s cautious tone

KUALA LUMPUR, July 2 — The ringgit opened slightly firmer against the US dollar on Thursday as easing concerns over the United States’ monetary policy outlook lifted sentiment following remarks by US Federal Reserve (Fed) officials on interest rates.

At 8 am, the local currency strengthened to 4.0900/0965 against the greenback from 4.0920/0965 at Wednesday’s close.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market focus was on comments by new Fed chair Kevin Warsh at the European Central Bank (ECB) Forum, which suggested the US central bank was in no hurry to adjust interest rates.

“Market focus was clearly on Warsh’s remarks at the ECB Forum last night, which suggested the Fed was in no hurry to raise rates, although he reiterated the central bank’s commitment to restoring price stability,” he told Bernama.

Mohd Afzanizam said softer-than-expected US economic data also supported the ringgit.

He noted that the ADP National Employment Report showed US private-sector employment increased by 98,000 in June, below market expectations of 118,000.

“The report also suggests Americans are taking longer to find work, although there are signs of labour supply constraints in certain industries,” he said.

At the opening, the ringgit was mostly lower against a basket of major currencies.

It weakened against the British pound to 5.4303/4389 from 5.4203/4262 at Wednesday’s close and slipped against the Japanese yen to 2.5160/5201 from 2.5144/5174 previously. However, it strengthened against the euro to 4.6532/6606 from 4.6600/6651 yesterday.

Against regional currencies, the local note was mixed.

It rose against the Philippine peso to 6.63/6.65 from 6.64/6.65 previously and edged up against the Indonesian rupiah to 227.8/228.3 from 227.9/228.3. However, it fell against the Thai baht to 12.2668/2944 from 12.2526/2708 yesterday and weakened against the Singapore dollar to 3.1564/1616 from 3.1555/1589 at Wednesday’s close. — Bernama