KUALA LUMPUR, July 10 – The ringgit was slightly higher against the US dollar in early trade Wednesday while steady demand continued to provide support for the greenback, an analyst said.

At 9 am, the ringgit stood at 4.7050/7110 versus the US dollar compared to yesterday’s close of 4.7055/7105.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar Index is still holding up, signalling a resilient demand for the greenback amid hopes of interest rate cuts.  

Earlier, Federal Reserve (Fed) chair Jerome Powell’s testimony to the US Congress suggested that the Fed is on track to cut rates should economic data warrant such a response.

“Cutting the rates too little and too late could risk slowing the economy while he admitted inflation is not only a risk that the Fed is currently facing,” Mohd Afzanizam told Bernama.

On the home front, he said investors will be monitoring the Bank Negara Malaysia’s (BNM) monetary policy committee meeting for their decision on the overnight policy rate (OPR) due on Thursday.

“We believe the BNM will keep the rate unchanged at 3.00 per cent. Should the Fed start to cut the rates in September, it will narrow the gap between the Fed Fund Rate and the OPR.

“This should be positive for ringgit towards the later part of the year,” he added.

Meanwhile, the ringgit traded higher against a basket of major currencies.

The local note appreciated against the Japanese yen to 2.9140/9179 from Tuesday’s close of 2.9219/9252, moved higher to 6.0158/0235 against the British pound from 6.0273/0337 and gained vis-a-vis the euro to 5.0870/0935 from 5.0923/0977.

The ringgit traded mostly higher against its ASEAN peers.

It edged up versus the Singapore dollar to 3.4829/4876 from 3.4848/4887 yesterday and rose to 12.9187/9402 against the Thai baht from 12.9268/9456 previously.

The local note was unchanged against the Indonesian rupiah at 289.4/290.0 and was slightly higher vis-a-vis the Philippine peso at 8.04/8.06 compared to 8.05/8.06 previously.


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