KUALA LUMPUR, Dec 16 — The ringgit ended firmer against the US dollar today on continued buying interest.
At 6 pm, the local note stood at 4.2060/2090 against the greenback compared with yesterday’s close of 4.2260/2310.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar index (DXY) fell 0.3 per cent to 96.224, as the market has already priced in the hawkish stance by the Federal Reserve (Fed) during its final Federal Open Market Committee (FOMC) meeting last night.
He believes that the Fed is on track to remove the monetary policy accommodation next year with a 75 basis points hike in the Federal Fund Rate.
“Also, the Fed has decided to lower their asset purchases programme from US$90 billion to US$60 billion beginning in January.
“While the ringgit has appreciated against the greenback, the question now is on the sustainability of such trend amidst a backdrop of possible divergence in monetary stance among the major central banks,” Mohd Afzanizam told Bernama.
He said the European Central Bank (ECB) Governing Council’s decision will be announced today and markets shall see whether the Pandemic Emergency Purchase Programme (PEPP) would be extended beyond the March 2022 dateline.
“The ECB is deemed to be more dovish in respect to the growth and there could be a chance that their path to monetary policy normalisation may not be synchronised with their counterparts in the United States,” the economist noted.
Meanwhile, the ringgit ended higher vis-a-vis a basket of other major currencies.
It rose against the British pound to 5.5902/5942 from 5.6033/6099 Wednesday, and appreciated against the euro to 4.7587/7621 from 4.7644/7700.
The local currency also rose against the Singapore dollar to 3.0829/0853 from 3.0890/0931, and improved versus the Japanese yen to 3.6846/6876 from 3.7152/7199 previously.
— Bernama
