KUALA LUMPUR: The ringgit continued its strong stride today, hitting a near one-year high after strengthening against the US dollar for nine straight days.
An analyst said the positive market reaction to the Federal Open Market Committee (FOMC) meeting statement lifted the ringgit's performance on Thursday.
At 6 pm, the ringgit surged 210 basis points to 4.5675/5710, compared to the greenback's closing of 4.5885/5925 on Wednesday.
The previous high of 4.5865/5895 was registered on Aug 11, 2023.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was persistently on an upward bias as the anticipation for the US rate cut is gaining further momentum post-FOMC meeting last night.
It was reported that the FOMC had maintained the Federal Funds Rate (FFR) at the 5.25-5.50 per cent target range.
"Perhaps the markets have come to the realisation that the Federal Reserve (Fed) is going to reduce the policy rates as it needs to shift its focus to preserve growth as inflation is expected to trend towards the 2.0 per cent goal.
"It appears that the two rate cuts are still on the cards based on the market expectation," he told Bernama.
Having said that, the interest rate differential between the FFR and overnight policy rate (OPR) would narrow when the Fed starts to cut the rates.
"That has helped improve the value of the ringgit as they see better prospects for the Malaysian currency," said Mohd Afzanizam.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan expected the strength of the dollar to begin to wane as demand for the currency declines with the Fed's interest rate cuts.
"We believe that robust growth fundamentals and a current account surplus will further support the continued appreciation of the ringgit," he said.
The local note traded higher against a basket of major and ASEAN currencies.
The ringgit rose against the British pound to 5.8272/8317 from 5.8875/8926, appreciated against the euro to 4.9229/9266 from 4.9680/9723 and improved against the Japanese yen to 3.0450/0475 from 3.0515/0545 at yesterday's close.
Among ASEAN currencies, the ringgit inched up against the Indonesian rupiah to 281.2/281.6 from 282.1/282.5 and improved against the Singapore dollar to 3.4124/4153 from 3.4273/4306 at the close yesterday.
It edged up against the Philippine peso to 7.83/7.84 from 7.86/7.87 and improved vis-a-vis the Thai baht to 12.8239/8384 from 12.8717/8880 previously.