RINGGIT A TAD HIGHER AS SOFT US DATA STRENGTHENS US RATE CUT EXPECTATIONS

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Dec 2 (Bernama) -- The ringgit ended marginally higher against the greenback on Tuesday as weaker-than-expected US manufacturing data strengthened expectations of a cut in US interest rates next week.

At 6 pm, the ringgit climbed to  4.1275/1330 versus the greenback compared to Monday’s close of 4.1300/1365.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit hovered in a narrow range today, oscillating between RM4.1300 and RM4.1350 for much of the session.

“This occurred despite the lower-than-expected Institute for Supply Management Index for the US manufacturing sector in November.  While such data points support a cut in the US interest rate decision next week, there seems to be a cautious mode among the traders as some of the US Federal Reserve officials may not be comfortable with cutting the interest rate,” he told Bernama.

However, he noted that the odds for a US interest rate cut based on the futures contract are currently at more than 90 per cent.

At the close, the ringgit trended higher against major currencies.

It appreciated versus the British pound to 5.4524/4597 from 5.4644/4730 at Monday’s close, improved against the euro to 4.7920/7984 from 4.7995/8070, and climbed vis-a-vis the Japanese yen to 2.6463/6500 from 2.6594/6637.

The local note traded mixed against ASEAN currencies.

It gained versus the Singapore dollar to 3.1816/1861 from 3.1880/1932 at Monday’s close and strengthened vis-à-vis the Thai baht to 12.8928/9164 from 12.9026/9290.

The ringgit dipped against the Indonesian rupiah to 248.2/248.7 from 247.8/248.3 and was little changed against the Philippine peso at 7.05/7.06 from 7.05/7.07 yesterday.

-- BERNAMA