Ringgit holds steady against US Dollar, mixed performance with major currencies

The Malaysian ringgit opened the trading week almost unchanged against the US dollar, while showing a mixed performance against other major currencies. This trend reflects a cautious market sentiment amidst varying economic indicators and global financial conditions.

Current Exchange Rates and Market Sentiment

As of the latest trading session, the ringgit was quoted at 4.6575/4.6600 against the US dollar, maintaining a relatively stable position from the previous close. This stability is largely attributed to the anticipation of potential rate cuts by the US Federal Reserve, which could influence currency markets globally. According to an analyst, "The ringgit has shown resilience against the greenback, with expectations of a dovish stance from the Fed providing a supportive backdrop".

Performance Against Major Currencies

The ringgit's performance against other major currencies has been mixed. It appreciated against the British pound and the euro but depreciated against the Japanese yen. Specifically, the ringgit was trading at 6.0269/0333 against the British pound and 5.0691/0745 against the euro, showing improvements from previous levels. However, it weakened against the Japanese yen, trading at 2.9978/3.001 from 2.9958/9976.

Factors Influencing the Ringgit

Several factors are influencing the ringgit's performance:

US Federal Reserve Policies: The anticipation of US rate cuts has a significant impact on the ringgit. A dovish stance from the Fed typically weakens the US dollar, making other currencies like the ringgit more attractive.

Global Economic Indicators: Economic data from major economies, including inflation rates and GDP growth, play a crucial role. For instance, higher-than-expected US inflation data earlier this year suggested that the Fed might keep interest rates steady, impacting the ringgit's performance against the dollar.

Regional Economic Conditions: The ringgit's value is also affected by economic conditions within the ASEAN region. The currency showed mixed results against ASEAN currencies, remaining almost flat against the Indonesian rupiah and the Philippine peso.

Short-Term Outlook

The short-term outlook for the ringgit appears cautiously optimistic. Analysts suggest that if the US Federal Reserve proceeds with rate cuts, the ringgit could strengthen further against the US dollar. However, ongoing global economic uncertainties and regional economic performance will continue to play a pivotal role.

Expert Opinions

Dr. Mohd Afzanizam Abdul Rashid, an economic analyst, noted, "The ringgit's mixed performance against major currencies reflects the current economic uncertainties. While the potential US rate cuts provide a positive outlook, regional economic conditions and global financial stability remain key factors to watch".

The Malaysian ringgit's performance against the US dollar and other major currencies highlights the complex interplay of global and regional economic factors. With the US Federal Reserve's potential rate cuts on the horizon, the ringgit may see further stability or even appreciation against the dollar. However, continuous monitoring of economic indicators and market sentiment is essential for understanding the ringgit's future trajectory.