Ringgit appreciates against US dollar, worst likely over
KUALA LUMPUR: The ringgit gained against the US dollar today on expectations of the dollar liquidation and that the US dollar index has topped for the year, a dealer said.
At 6 pm, the local note rose to 4.6885/6950 against the greenback from Tuesday’s close of 4.7340/7385.
SPI Asset Management managing director Stephen Innes said one of the premises investors have been backing is the peak US Federal Reserve’s hawkish narrative, which would likely cause an unwind of stretched US dollar bets before the end of the year.
“We are entering that window now, and I suspect Malaysian exporters have started unloading US dollars they have been holding, thinking the top in the US dollar Index chart is in for the year,” he told Bernama.
He further said that the US Consumer Price Index (CPI), scheduled to be released on Thursday, would certainly show that the US has likewise reached peak inflation, which could stimulate even more US dollar sales.
“I expect it will be up and down as global economic concerns play out,” he said, adding that with the top in US rates priced in, he would suggest the worst is over for the ringgit.
Commenting on the 15th General Election’s (GE15) influence on the ringgit, he stated that the election risk normally has no long-term impact, but if Malaysia clears that obstacle, the local notes would improve further.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
It improved against the Singapore dollar to 3.3513/3562 from 3.3744/3781 on Tuesday and rose vis-a-vis the Japanese yen to 3.2159/2208 from 3.2371/2404 yesterday.
The local currency also improved against the euro to 4.7101/7177 from 4.7345/7390 at Tuesday’s close and appreciated versus the British pound to 5.3651/3725 from 5.4389/4441 previously. – Bernama
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