Ringgit closes higher against US dollar

KUALA LUMPUR: The ringgit bucked the regional trend to close higher against the US dollar today as sentiment remained bullish ahead of the new year.

At 6pm, the local note traded at 4.1760/1800 against the US dollar compared with Wednesday’s 4.1770/1810.

Kenanga Investment Bank, in a research note, said the US Federal Reserve’s less hawkish signal and tapering of its planned interest rate hikes would cast a pall on a strong US dollar in 2019 and cut the slack on the downward pressure on emerging market currencies.

“Though we expect the downward pressure on the ringgit to spill over into 2019, due to the uncertainty in the global economy, it would somewhat be subdued. Hence, we maintain the ringgit versus US dollar year-end forecast of 4.15 although we expect it to continue to test the 4.20 level in the near-term,“ it said.

Regionally, Asian currencies weakened against the greenback after the US Federal Reserve raised interest rate by 25 basis points.

The US central bank trimmed its median forecast from three to two hikes next year, leaving open the possibility that continued strong data could force the US Federal Reserve to raise rates to the point where they start to brake the economy’s momentum.

However, the ringgit was weaker against major currencies.

It eased against the Singapore dollar to 3.0513/0553 from 3.0498/0543 on Wednesday and fell against the Japanese yen to 3.7379/7425 from 3.7172/7217.

The local unit weakened against the British pound to 5.2968/3036 from yesterday’s 5.2852/2915 and depreciated against the euro to 4.7924/7991 from 4.7568/7622 yesterday. — Bernama

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