KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
The ringgit continued its uptrend on Wednesday, closing at a near 11-month high of RM4.58 against the US dollar, driven by the Bank of Japan’s (BOJ) decision to raise interest rates and the anticipation of a Federal Reserve interest rate cut in September.
At 6pm, the ringgit soared 315 basis points to 4.5885/5925, compared to the greenback’s closing of 4.6200/6235 on Tuesday (July 30).
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the BOJ’s move signalled confidence in Japan’s economic recovery, which could bolster investor confidence in Asian currencies if the positive sentiment extends to global markets.
“This will lead to a continued strengthening of the ringgit. Higher closing in the majority of Asian markets today is evidence that investors are now starting to move towards emerging markets in Asia,” he told Bernama.
Mohd Sedek added that attractive interest rates in Japan might encourage investors to seek higher yields elsewhere, including in emerging markets like Malaysia.
“As investors diversify their portfolios, capital inflows into Malaysian assets can further strengthen the ringgit,” he noted.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that the BOJ raised its policy rates by 15 basis points, bringing it to 0.25%. He anticipated that the combination of BOJ’s rate rise and the expectation of a US rate cut would boost demand for emerging market currencies, including the ringgit.
The Federal Open Market Committee (FOMC) is expected to announce their decision later on Wednesday, with most consensus projecting no change in the Fed Fund Rate. While the Fed is expected to keep its policy rate unchanged, Mohd Afzanizam foresees that the Fed would want to provide clear guidance on the eventual rate cut, with market participants assigning a higher probability for September.
Performance Against Major Currencies
The ringgit traded mostly higher against a basket of major currencies:
- British Pound: Rose to 5.8875/8926 from 5.9427/9472.
- Euro: Higher at 4.9680/9723 from 5.0044/0082.
- Japanese Yen: Fell to 3.0515/0545 from 2.9845/9870.
Performance Against ASEAN Currencies
The local note traded mostly higher against ASEAN currencies:
- Indonesian Rupiah: Rose to 282.1/282.5 from 283.3/283.7.
- Singapore Dollar: Improved to 3.4273/4306 from 3.4370/4398.
- Philippine Peso: Inched up to 7.86/7.87 from 7.87/7.89.
- Thai Baht: Slipped to 12.8717/8880 from 12.8319/8470.
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