KUALA LUMPUR, Jan 30 — The ringgit closed lower against the United States (US) dollar on the last trading day of the week, pressured by renewed demand for the greenback amid speculations surrounding the future leadership of the US Federal Reserve (US Fed).
At 6pm, the ringgit depreciated to 3.9440/9500 versus the US dollar from 3.9275/9315 at Thursday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar strengthened as investors reassessed US interest rate expectations following reports that former US Fed governor Kevin Warsh is being mentioned as a potential chairman.
“Warsh, who served at the US Fed from 2006 to 2011, was known as an inflation hawk, prompting markets to anticipate a more cautious stance on interest rate cuts should he assume the role,” he told Bernama.
Afzanizam added that the market appeared to believe the incoming US Fed chairman might not immediately align with the White House’s push for substantial interest rate reductions, given the central bank’s long-standing mandate to ensure price stability and maximum employment.
“Whoever takes on the US Fed chairman role will continue to follow the same policy playbook, as these objectives are embedded in law and preserving the institution’s credibility remains the US Fed’s top priority,” he said, noting that the news likely provided an opportunity for traders to lock in gains.
At the close, the ringgit traded mostly higher against a basket of major currencies.
It appreciated vis-à-vis the British pound to 5.4163/4245 from yesterday’s close of 5.4207/4263, climbed against the Japanese yen to 2.5562/5603 from 2.5616/5644, but edged lower against the euro to 4.6957/7029 from 4.6953/7001.
As for its performance against ASEAN peers, the ringgit strengthened vis-à-vis the Thai baht to 12.5250/5544 from 12.5930/6119 previously.
However, it slid against the Singapore dollar to 3.1077/1127 from 3.1065/1099, slipped versus the Philippine peso to 6.69/6.71 from 6.66/6.67, and weakened against the Indonesian rupiah to 234.9/235.4 from 234.4/234.7 yesterday.
