Ringgit closes lower ahead of US interest rate decision
KUALA LUMPUR : The ringgit ended lower against the greenback today, ahead of a decision on US interest rates later today and as the war between Israel and Iran continued to escalate.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the key indicator to watch is the 'dot plot' of the US Federal Reserve (Fed) funds rate, which essentially reflects the near-term outlook for US monetary policy.
The Fed dot plot is a chart used by the US federal open market committee (FOMC) to show the individual interest rate forecasts of its members.
'It appears that the Fed may not be keen to ease monetary policy, as the risk of higher inflation remains fairly evident with the ongoing conflict in the Middle East.
'Markets are bracing for the outcome of the FOMC meeting tonight,' he said.
Meanwhile, the US Dollar Index (DXY) fell 0.3% to 98.526 points despite the heightened geopolitical uncertainty.
Afzanizam noted that the ringgit moved within a tight range today, hovering between RM4.2425 and RM4.2515.
At 6pm, the local currency stood at 4.2500/4.2550 versus the greenback compared to yesterday's close of 4.2390/4.2475.
At the close, the ringgit traded mostly higher against a basket of major currencies.
It rose against the British pound to 5.7218/5.7285 from 5.7413/5.7528, and gained vis-à-vis the euro to 4.8888/4.8945 from 4.8986/4.9084, but it depreciated versus the Japanese yen to 2.9322/2.9359 from 2.9271/2.9332 at yesterday's close.
The ringgit was mostly lower against its Asean peers.
It dipped versus the Indonesian rupiah to 260.5/260.9 from 260.2/260.8, eased against the Singapore dollar to 3.3074/3.3115 from 3.3068/3.3137, and was down vis-à-vis the Thai baht to 13.0240/13.0449 from 13.0114/13.0443 previously.
However, it rose against the Philippine peso to 7.46/7.48 from 7.48/7.49 at yesterday's close.
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