Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the gap between the FFR and the overnight policy rate (OPR) is likely to narrow, which bodes well for the ringgit as investment returns from ringgit-denominated assets will become increasingly appealing.

“True enough, the ringgit-US dollar pair has pierced its immediate support level of RM4.2128 and presently, the immediate support level is located at RM4.0728.

“Hence, we will see the ringgit making another attempt to reach a new groundbreaking level next week,” he told Bernama.

Moving forward, markets will be monitoring key data points, namely the US Personal Consumption Expenditure inflation, which will be published on Friday along with the University of Michigan Consumer Sentiment Index.

The sentiment index rates the relative level of current and future economic conditions.

“Markets were receptive of the half-point cut by the Federal Reserve (Fed) and it seems the US economy is in for a soft landing, alleviating recession fears,” Afzanizam noted.

At 6pm, the local note appreciated to 4.2005/4.2070 versus the greenback from yesterday’s close of 4.2025/4.2105.

Within six months, the ringgit rose 12.67% against the US dollar.

Meanwhile, the ringgit traded mostly higher against a basket of major currencies.

It gained versus the euro to 4.6878/4.6950 from yesterday’s closing of 4.6976/4.7065, strengthened vis-a-vis the Japanese yen to 2.9182/2.9229 from 2.9442/2.95008, but marginally fell against the British pound to 5.5841/5.5928 from yesterday’s close of 5.5822/5.5928.

The local note traded mixed against Asean currencies.

It edged up against the Singapore dollar to 3.2507/3.2559 from 3.2567/3.2632 at yesterday’s close, but eased against the Thai baht to 12.7026/12.7288 from 12.6983/12.7294.

The ringgit was almost flat against the Philippine peso at 7.55/7.56 from 7.55/7.58 yesterday but inched down versus the Indonesian rupiah to 277.2/277.8 from 275.7/276.4 previously.