KUALA LUMPUR, Feb 2 (NNN-Bernama) — Malaysian ringgit appreciated against the US dollar Thursday morning following the United States (US) Federal Reserve’s (Fed) encouraging move to slow the pace of its interest rate hikes during its recent meeting.
At 9 am, the ringgit strengthened to 4.2280/2350 versus the greenback compared with 4.2655/2700 at Tuesday’s close.
SPI Asset Management managing partner Stephen Innes said the Fed is seeing nearing the end of its aggressive rate hike cycle as inflation in the US has subsided.
On Wednesday, the Fed raised its interest rate by 25 basis points as expected, but hinted that continued monetary policy tightening may be needed before the central bank takes a pause on its fight against inflation.
“The Fed was less hawkish than expected, with chairman Jerome Powell’s guidance eliminating one big hurdle for ringgit appreciation.
“Now local traders will be gauging China’s post-reopening economic recovery for their next move,” he told Bernama.
The latest economic data from China were mixed, with its manufacturing purchasing managers index (PMI) showing a mild improvement in January although the reading remained below 50, indicating a contraction.
The Caixin PMI index stood at 49.2 in January compared to December’s 49.0, while the manufacturing PMI rose to 50.1 during the month from 47.0 in December, according to the country’s National Bureau of Statistics.
At home, the ringgit traded mostly lower against a basket of major currencies, except versus the British pound where it increased to 5.2406/2493 from 5.2559/2615 at Tuesday’s close.
The local note depreciated against the Singapore dollar to 3.2406/2462 from Tuesday’s 3.2386/2425, eased vis-a-vis the Japanese yen to 3.2913/2970 from 3.2713/2750 earlier and was lower against the euro at 4.6584/6661 from 4.6187/6236 previously.