KUALA LUMPUR (March 30): The ringgit strengthened 0.6% against the US dollar after the US Federal Reserve Chair Janet Yellen said the central bank should be cautious in its interest rate hike assessment.
At 10:12am, the ringgit was traded at 3.9698 versus the US dollar. The exchange rate was between 3.9595 and 3.9757 so far today.
Over the last one year, the ringgit had traded at its firmest and weakest points against the US dollar at 3.5388 and 4.4812 respectively.
Today, Reuters reported that Yellen said on Tuesday the US central bank should proceed only cautiously as it looks to raise interest rates, pushing back on a handful of her colleagues who have suggested another move may be just around the corner.
In her first comments since the Fed decided to hold rates steady two weeks ago, Yellen said inflation has not yet proven durable against the backdrop of looming global risks to the US economy, including still-low oil prices and concerns over China.
In Malaysia, M&A Securities Sdn Bhd research head Rosnani Rasul said the ringgit was expected to gain against the US dollar following Yellen's remarks.
"As such, we expect an upbeat local market performance today driven by the aforementioned catalysts," Rosnani wrote in a note today.
Malaysian shares rose with the ringgit. At 10:28am, the FBM KLCI added 7.62 points to 1,722.66.