KUALA LUMPUR: The ringgit closed marginally higher against the US dollar today on renewed buying interest amid slightly easing demand for the greenback ahead of the European Central Bank (ECB) meeting on Thursday, said an analyst.
At 6 pm, the local currency strengthened to 4.4480/4510 versus the greenback from Monday’s close of 4.4520/4550.
SPI Asset Management managing partner Stephen Innes said the expectation that the ECB would consider a 50-basis point (bps) rate hike to tame the record-high inflation boosted the demand for the ringgit.
"The ECB has basically pre-announced a 50-bps hike, which strengthened the euro this morning and weakened the US dollar across the board.
"The stronger euro is having a positive effect across currency markets -- almost a magnetic attraction.
"However, I would view this shift along the lines of profit-taking rather than a bullish pivot,” he told Bernama.,
He said with the market pricing a 75-bps Federal Open Market Committee (FOMC) rate hike as opposed to a 100-bps increase, it too had offered up some breathing room for the ringgit.
According to a report, the US Federal Reserve is likely to deliver another 0.75 per cent rate hike later this month and reportedly leaning against raising by 100 bps despite a robust June Consumer Price Index report.
However, the ringgit traded lower against a basket of major currencies.
The local currency weakened against the Singapore dollar to 3.1943/1966 compared with 3.1884/1908 on Monday and went down versus the Japanese yen to 3.2323/2347 from 3.2203/2227 previously.
It also depreciated versus the British pound to 5.3478/3514 from 5.3326/3362 yesterday and fell vis-a-vis the euro to 4.5592/5623 from 4.5223/5254. - Bernama