Ringgit extends gains against greenback on expectation of slower US interest rate hike pace

Publish date: Mon, 16 Jan 2023, 09:48 AM

KUALA LUMPUR: The ringgit continued its positive momentum this morning to open slightly higher against the greenback on the expectation of a US Federal Reserve (Fed) downshift to a 25 basis points interest rate hike.

At 9 am, the ringgit stood at 4.3305/3350 against the greenback from Friday's close of 4.3325/3375.

SPI Asset Management managing partner Stephen Innes told Bernama that the expected downshift in US interest rates in February and the China reopening factor have continued to drive sentiment.

He said the expected boost to commodity prices, particularly crude oil, as China's economy returns to full swing is also boosting appetite for the local currency.

"Traders will be eyeing a gaggle of Fed (data) this week for confirmation on how the board views falling inflation.

"Moving from high and rising inflation to moderating inflation is good for risky assets as it should dial down the Fed's hawkish impulse," Innes said.

The Fed penciled in a terminal rate of 5.1 per cent for 2023 at the last Federal Open Market Committee (FOMC) meeting.

Meanwhile, the ringgit traded mostly lower against a basket of major currencies, except against the euro, where it rose to 4.6960/7009 from 4.6986/7040 at last Friday's close.

The local unit was lower against the Singapore dollar to 3.2839/2878 from 3.2782/2825, fell vis-a-vis the Japanese yen to 3.3882/3923 from 3.3703/3744 and against the British pound, where it fell to 5.3040/3095 from 5.2973/3035 previously.

  - Bernama

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