Ringgit settles flat vs US dollar as inflation fears cloud sentiment

Ringgit settles flat vs US dollar as inflation fears cloud sentiment

A man accepts Malaysian ringgit from a money changer May 24, 2022. — Picture by Devan Manuel

Wednesday, 17 Aug 2022 7:26 PM MYT

KUALA LUMPUR, Aug 17 — The ringgit ended flat against the US dollar today amid the possibility of the Federal Reserve (Fed) taking a significant interest rates adjustment to bring rising inflation under control.

At 6pm, the local currency stood at 4.4660/4685 versus the greenback from yesterday’s close of 4.4660/4680.

The United States Commerce Department data showed construction of new homes hit 18-month lows in July.

The data pointed out that new residential construction in the US fell 9.6 per cent last month to 1.45 million, suggesting that the real estate market is struggling more than expected, and this could generate further inflation.

A trader said this has further boosted the greenback’s safe-haven appeal ahead of the release of the Fed’s July meeting minutes and US July retail sales data later today that could give further clues about the pace of future interest rate hikes.

He said Fed officials have signalled the need for more hikes until inflation is under control.

“At home, market volatility is expected to continue until certainty emerges,” he told Bernama.

Meanwhile, the ringgit was traded mixed against a basket of major currencies today.

It rose against the Singapore dollar at 3.2315/2338 from 3.2346/2365 at yesterday’s close and higher vis-a-vis the Japanese yen at 3.3126/3147 from 3.3284/3301 previously.

The local unit declined versus the British pound to 5.4048/4078 from 5.3686/3710 yesterday and dipped against the euro at 4.5455/5480 from 4.5258/5279. — Bernama