Write an article about Ringgit rises vs greenback as Fed signals Sept rate cut .Organize the content with appropriate headings and subheadings (h1, h2, h3, h4, h5, h6), Retain any existing tags from
KUALA LUMPUR: The ringgit rebounded, opening higher against the US dollar on Monday after US Federal Reserve (Fed) chair Jerome Powell hinted at a possible interest rate cut in September.
At 8am, the local note rose 210 percentage in points (pips) to 4.2035/4.2270 from Friday’s close of 4.2245/4.2295.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said expectations of a September rate cut are building after Powell’s remarks at the Jackson Hole Economic Policy Symposium last Friday.
“He indicated that the restrictive monetary policy stance may warrant adjustment in light of the evolving economic outlook and shifting balance of risks,” he noted.
Investors have since raised bets on a rate cut at the Federal Open Market Committee meeting on Sept 16-17.
Afzanizam said short-term US Treasury yields fell more than long-dated securities.
“The two-year note yielded 3.68%, down 11 basis points on Friday, while the 10-year yield fell seven basis points to 4.26%,” he said.
He added that the outlook for emerging market currencies, including the ringgit, looks brighter against the dollar in the near term.
At the same time, the ringgit opened lower against a basket of major currencies.
It eased against the British pound to 5.6781/5.7098 from 5.6659/5.6726 last Friday, slipped against the Japanese yen to 2.8545/2.8704 from 2.8408/2.8443, and weakened versus the euro to 4.9210/4.9485 from 4.8996/4.9054.
The ringgit was mixed against other Asean currencies.
It strengthened against the Indonesian rupiah to 257.0/258.6 from 258.3/258.7 and firmed against the Philippine peso to 7.38/7.43 from 7.42/7.43.
However, it eased against the Singapore dollar to 3.2776/3.2962 from 3.2763/3.2805 and slipped against the Thai baht to 12.9602/13.0423 from 12.9387/12.9592 last Friday.
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