KUALA LUMPUR, Sept 27 – The ringgit continued yesterday’s downtrend to opened lower against the US dollar this morning as the greenback strengthened on the possibility of another interest rate hike before the year-end, dealers said. At 9am, the local unit depreciated to 4.2150/2190 from 4.2050/2080 recorded at 6pm yesterday. The US dollar appreciated overnight following Federal Reserve Chairwoman Janet Yellen’s hawkish tone on rates, prompting renewed suggestions that a December move (to increase rates) was on the cards.
“A gradual approach is particularly appropriate in light of subdued inflation and a low neutral real interest rate, which imply that the Federal Open Market Committee will have only limited scope to cut the federal funds rate should the economy be hit with an adverse shock. But, we should also be wary of moving too gradually,” she was quoted as saying after the meeting.
Against other major currencies, the ringgit was mostly lower except against the Japanese Yen as it rose to 3.7493/7539 this morning from 3.7649/7686 on Tuesday. The local currency was weaker versus the Singapore dollar at 3.1096/1134 from 3.1074/1101 yesterday and retreated vis-a-vis the British pound to 5.6679/6737 from 5.6633/6694 yesterday. The ringgit also decreased against the Euro to 4.9686/9746 from 4.9678/9722 on Tuesday, despite mounting worries over the political fallout in Germany and other euro zone countries. — Bernama