KUALA LUMPUR, July 9 (Bernama) -- Bursa Malaysia closed lower on Thursday as renewed geopolitical tensions in West Asia weighed on investor sentiment. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 5.97 points, or 0.36 per cent, to 1,677.64 from Wednesday's close of 1,683.61. The benchmark index opened 2.62 points lower at 1,680.99, and moved between 1,676.18 and 1,683.80 throughout the session. However, market breadth was slightly positive, with gainers leading losers 533 to 504, while 547 counters were unchanged, 1,112 untraded, and 12 suspended. Turnover slipped to 2.64 billion units valued at RM2.19 billion from 2.96 billion units valued at RM2.18 billion on Wednesday.
The ringgit is forecast to remain under pressure against the US dollar in the near term, driven by the Federal Reserve’s less dovish monetary stance, according to Kenanga Research.
Key Projections
- Exchange Rate: The ringgit is expected to stay above 4.50 against the US dollar going into 2025.
- Recent Performance: The ringgit, which had gained 15% against the dollar between January and September, has since retreated amid the strength of the US economy. It last traded at 4.5060, up 1.88% year-to-date.
Factors Influencing the Ringgit
- US Economic Strength: Strong domestic demand and inflationary pressures are propping up the dollar.
- Fed’s Monetary Policy: The Fed’s cautious approach to rate cuts bolsters the dollar’s appeal, with markets anticipating only one rate cut in 2025.
- Trump’s Policies: Uncertainty around policies under the incoming US administration may lead the Fed to delay cuts further.
Outlook for 2025
- Kenanga projects two to three Fed rate cuts in 2025, which could provide relief for the ringgit in the latter half of the year.
- In Malaysia, Bank Negara’s overnight policy rate is expected to remain steady at 3% through 2025.
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