By Zarul Effendi Razali
KUALA LUMPUR, Dec 5 (Bernama) -- The ringgit extended gains to close higher against the greenback on Thursday on rising confidence that there will be another US interest rate cut in the middle of the month.
At 6 pm, the local currency bounced to 4.4250/4305 against the US dollar, compared to Wednesday’s close of 4.4505/4550.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was well supported with it rising as high as RM4.4173 against the US dollar in the morning session but headed lower to around RM4.4275 towards the end of the day.
“(The) trend was in tandem with the decline in the US Dollar Index (DXY) to 106.206 points. It seems that the US Federal Reserve (Fed) is on track to reduce the Fed funds rate by (another) 25 basis points in the upcoming Federal Open Market Committee (FOMC) meeting on Dec 17-18 as the US monetary policy remains restrictive and has affected the growth momentum.
“The latest print on the ISM Index for the non-manufacturing sector at 52.1 points in November from 56 points previously suggests that the US services sector is softening although it is still generally expansionary,” he told Bernama.
Afzanizam said the Fed might want to ease its monetary policy so that a soft landing for the US economy can be realised in 2025.
The ringgit also traded higher against other major currencies.
It strengthened versus the British pound to 5.6286/6356 from 5.6415/6472, appreciated against the euro to 4.6586/6644 from 4.6735/6782 and climbed against the Japanese yen to 2.9439/9478 from 2.9546/9580 at Wednesday’s close.
The local unit traded mostly higher against ASEAN currencies.
It improved against the Singapore dollar to 3.2985/3029 versus 3.3057/3093 on Wednesday, gained against the Indonesian rupiah to 278.9/279.4 from 279.2/279.6 and went up versus the Thai baht to 12.9462/9710 from 12.9563/9751 previously.
The ringgit was almost flat against the Philippine peso at 7.64/7.66 from 7.64/7.65.
-- BERNAMA
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