Ringgit Eases Against US Dollar Amid Rising West Asia Tensions
By Danni Haizal Danial Donald
KUALA LUMPUR, June 22 (Bernama) -- The ringgit eased against the US dollar on Monday, as growing uncertainties surrounding the West Asia conflict and expectations of a potential United States (US) Federal Reserve (Fed) interest rate hike fuelled demand for the greenback.
At 6 pm, the local note eased to 4.1465/1500 against the greenback from 4.1340/1395 at the close last Friday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the unstable negotiations for a peace agreement between the US and Iran have led markets to expect the Fed to raise interest rates to temper the buildup in inflationary pressures.
“The currency market continues to be affected by the Federal Open Market Committee (FOMC) meeting last week.
“The lack of forward guidance in the FOMC statement has led markets to second-guess the Fed’s next move, which is to raise the Fed Fund Rate by 25 basis points this year,” he told Bernama.
Meanwhile, SPI Asset Management managing partner Stephen Innes said elevated US Treasury yields continue to weigh on Asian currencies, including the ringgit.
“Additionally, the decline in energy prices is another negative factor for Malaysia, the region’s only significant net energy exporter,” he added.
At the close, the ringgit was mostly lower against a basket of major currencies.
It slipped against the British pound to 5.4850/4896 from 5.4709/4782 at last Friday’s close, softened versus the euro to 4.7506/7547 from 4.7376/7439 last week, and was almost flat vis-a-vis the Japanese yen at 2.5635/5658 from 2.5636/5671 previously.
The local note was also mostly lower against regional currencies.
It eased against the Singapore dollar to 3.2069/2098 from 3.2019/2064 at Friday’s close, and fell versus the Thai baht to 12.5919/6075 from 12.5856/6074 previously.
The ringgit was almost unchanged versus the Indonesian rupiah at 232.3/232.6 from 232.2/232.5 last Friday, but rose against the Philippine peso to 6.78/6.79 from 6.80/6.81 previously.
-- BERNAMA