On a Wednesday morning in Kuala Lumpur, the ringgit stood still against the American dollar, holding the same quiet level it had kept the day before, even as it gained ground against other currencies. The stillness rests on a larger story: October's American inflation came in hotter than expected, and that old fear of tighter money has returned to hover over distant markets. Traders are now holding their breath for the Federal Reserve's meeting in early December, where a larger-than-usual rate increase has been openly discussed. For now, the ringgit waits, steady but watchful, for what the wor
Ringgit Edges Higher Against Major Currencies but Holds Flat Against Dollar on Fed Hike Bets
The ringgit stood still against the dollar but moved against nearly everything else
Mark
The ringgit didn't move against the dollar. So why is this a story?
Mimi
Because flat against the dollar while rising against the yen, euro and pound shows the dollar is the currency doing the pushing. The Dollar Index gained 0.57 per cent overnight.
Mark
What set that off?
Mimi
October US CPI rose 0.4 per cent month-on-month against a consensus of 0.3. That small gap revived talk of more Fed tightening, and the two-year Treasury yield rose 18 basis points to 4.74 per cent.
Luke
Let me separate what's confirmed from what's attributed. The CPI figure and the market moves are data. The Fed comments come to us secondhand through one economist.
Mimi
Fair. Afzanizam says Waller indicated a 50 basis point hike could happen on Dec 8 and 9, and that Logan sees at least a two-quarter-point rise as necessary. Could, not will.
Luke
And the RM4.06 to RM4.08 range is his forecast, not a market fact. It also sits above the current 4.0540, so it implies the ringgit weakens.
Mark
Was the ASEAN picture consistent?
Mimi
No. It gained on the Singapore dollar and the baht, was nearly flat on the rupiah, and unchanged on the peso.
Luke
The report doesn't say why those differ, so I wouldn't guess.
Mark
So what do we watch?
Mimi
The December meeting, and whether the dollar-ringgit pair actually drifts into that forecast range.
Der Puls
- American inflation rose faster than forecast in October, reviving fears that the Federal Reserve will tighten its grip on money again.
- The two-year US Treasury yield jumped 18 basis points to 4.74 per cent and the dollar index climbed 0.57 per cent, unsettling currency markets overnight.
- The ringgit held flat against the dollar at about RM4.05, while firming against the yen, euro and pound, with a mixed picture among ASEAN peers.
- Analysts expect downward pressure on the ringgit, with the dollar-ringgit pair seen trading between RM4.06 and RM4.08 during the day.
- All eyes now turn to the Federal Reserve's December 8-9 meeting, where officials have floated a 50 basis point hike that could reshape the currency's path.
On a Wednesday morning in Kuala Lumpur, the ringgit stood still against the American dollar, holding the same quiet level it had kept the day before, even as it gained ground against other currencies. The stillness rests on a larger story: October's American inflation came in hotter than expected, and that old fear of tighter money has returned to hover over distant markets. Traders are now holding their breath for the Federal Reserve's meeting in early December, where a larger-than-usual rate increase has been openly discussed. For now, the ringgit waits, steady but watchful, for what the world's most powerful central bank will decide next.
At eight o'clock on Wednesday morning in Kuala Lumpur, the ringgit was quoted at 4.0540/0590 against the US dollar, exactly where it had closed the previous day. It had not moved against the greenback, but it had moved against almost everything else.
The cause lay in fresh American inflation figures. Consumer prices rose 0.4 per cent in October, above the 0.3 per cent economists had expected, and that surprise revived worries that the Federal Reserve would tighten monetary policy further. Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia said the reading had sharpened those concerns.
Overnight, markets responded sharply. The two-year Treasury yield climbed to 4.74 per cent and the dollar index strengthened. Officials at the Fed had also signalled that a half-point rate hike was possible when policymakers meet on December 8 and 9. Afzanizam warned that the ringgit could come under pressure, forecasting a trading range of RM4.06 to RM4.08 for the day.
Against other majors, the ringgit was firmer, gaining on the yen, euro and pound. Among regional peers the picture was mixed: it strengthened against the Singapore dollar and Thai baht, while holding almost steady against the rupiah and peso.
Until the Fed meets, the ringgit will be read through each new piece of American data and every remark from its officials.
At 8 am in Kuala Lumpur on Wednesday, the ringgit was quoted at 4.0540/0590 against the US dollar, the same level at which it had closed on Tuesday, when the quote was 4.0540/0580. The currency had not moved against the greenback, but it had against nearly everything else.
The backdrop was a fresh round of US inflation data. The Consumer Price Index rose 0.4 per cent month-on-month in October, above the consensus estimate of 0.3 per cent. According to Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, the reading heightened concerns that the US Federal Reserve will tighten monetary policy further.
Markets reacted overnight. The yield on the two-year US Treasury note climbed 18 basis points to 4.74 per cent, and the US Dollar Index strengthened 0.57 per cent to 102.233 points. Afzanizam pointed to comments from two Fed officials. Governor Christopher Waller indicated that a 50 basis point hike could happen when the Federal Open Market Committee reconvenes on Dec 8 and 9. Dallas Fed President Larrie Logan, he said, sees at least a two-quarter-point rate hike as necessary.
Given that overnight move in the US market, Afzanizam told Bernama the ringgit could face downward pressure. He expects the dollar-ringgit pair to trade between RM4.06 and RM4.08 during the day, a range that sits above Wednesday's opening quote.
Against other major currencies, the ringgit opened firmer. It rose against the Japanese yen to 2.5540/5573 from 2.5642/5669, and against the euro to 4.5275/5331 from 4.5514/5559. Versus the British pound it strengthened to 5.4109/4175 from Tuesday's close of 5.4425/4479.
Among its ASEAN peers, the picture was mixed. The ringgit improved against the Singapore dollar to 3.1627/1669 from 3.1726/1758 at yesterday's close, and climbed against the Thai baht to 12.0561/0800 from 12.1337/1497. It was almost flat against the Indonesian rupiah at 224.4/224.8, compared with 224.4/224.7 previously, and unchanged against the Philippine peso at 6.44/6.45.
The next marker is the Fed's Dec 8-9 meeting, where a 50 basis point hike has been floated. Until then, the dollar-ringgit pair will be read against the US data and what Fed officials say about it.
Bemerkenswerte Zitate
The dollar-ringgit pair could trade within an RM4.06 to RM4.08 range today, with the ringgit possibly under downward pressure.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
Möchten Sie die ganze Geschichte?
Das Original lesen bei The Star ↗