Fed raises rates for first time since 2023

The US Federal Reserve increased its benchmark interest rate by 25 basis points to 3.75-4.00 per cent, signalling a commitment to tightening monetary policy and fighting inflation.

“The Fed remains committed to tightening monetary policy to achieve price stability.”

Ringgit falls to 4.085 against dollar

The Malaysian ringgit weakened to 4.0855 against the US dollar on Thursday morning, down from 4.0835 on Tuesday, as the greenback strengthened following the Fed's hawkish decision.

Dollar index hits 100.322 points

The US dollar index surged to 100.322 points as investors moved money into dollar-denominated assets following the Fed's rate increase and hawkish guidance.

Treasury yields rise sharply

The two-year US Treasury yield climbed 7 basis points to 4.74 per cent, while the ten-year yield rose 2 basis points to 5.02 per cent, making US bonds more attractive to global investors.

Ringgit gains against other major currencies

While weakening against the dollar, the ringgit strengthened against the euro, yen, and British pound, reflecting the broader dollar rally rather than ringgit strength.

Mixed performance against ASEAN peers

The ringgit leapt against the Singapore dollar and Thai baht but weakened against the Indonesian rupiah and Philippine peso, showing uneven regional currency movements.

Economists expect further ringgit weakness

Bank Muamalat Malaysia's chief economist predicted the ringgit would trade between 4.08 and 4.10 against the dollar, with the Fed signalling another quarter-point rate hike later this year.

“The ringgit is expected to trade lower against the US dollar today, possibly around 4.08 to 4.10.”