Ringgit settles flat vs US dollar on Aug 17 as inflation fears cloud sentiment

Ringgit settles flat vs US dollar on Aug 17 as inflation fears cloud sentiment
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KUALA LUMPUR (Aug 17): The ringgit ended flat against the US dollar on Wednesday (Aug 17), amid the possibility of the Federal Reserve (Fed) taking a significant interest rate adjustment to bring rising inflation under control.

At 6pm, the local currency stood at 4.4660/4685 versus the greenback from Tuesday’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% 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 on Wednesday 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 on Wednesday.

It rose against the Singapore dollar at 3.2315/2338 from 3.2346/2365 at Tuesday’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 on Tuesday, and dipped against the euro at 4.5455/5480 from 4.5258/5279.