KUALA LUMPUR: The ringgit continued its appreciation against the US dollar today as investors are bullish on the expectations that the US Federal Reserve (Fed) will cut interest rates, said an analyst.
At 8 am, the ringgit strengthened to 4.3700/3850 against the US dollar compared with 4.3805/3850 at the close on Monday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the persistent decline in the US dollar index (DXY) suggested the highly anticipated interest rate cut in the US as early as September this year, which saw traders lowering their demand for the greenback.
"This has benefitted the currencies in emerging economies, including the ringgit.
"The Jackson Hole Symposium in the US this week would provide colour on this front as the Fed chairman Jerome Powell would shed more light on the potential rate cut in September," he told Bernama.
Mohd Afzanizam added that the next support level for the ringgit is 4.30 against the US dollar, assuming that the US is bullish about the interest rate cut.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies.
It increased vis-a-vis Japanese yen to 2.9799/9905 from 2.9946/9979, appreciated against the British pound to 5.6771/6966 from 5.6784/6843 at Monday's close, but fell against the euro to 4.8446/8612 from 4.8339/8388 yesterday.
The ringgit was also traded mostly higher against ASEAN currencies.
The local note rose against the Singapore dollar to 3.3412/3530 from 3.3424/3461 at Monday's close and was higher against the Philippine peso at 7.71/7.74 from 7.73/7.74 previously.
It also inched up versus the Indonesian rupiah to 280.9/282.1 compared with 281.6/282.1 at yeserday's close, but weakened vis-a-vis the Thai baht to 12.7142/7664 from 12.7126/7308 previously.