The local currency had already hit a new low of 4.69 at the start of trading, only to settle at 4.7025/4.7065 at 6pm. It closed at 4.6910/4.6940 yesterday.

UOB Kay Hian Wealth Advisors Sdn Bhd head of wealth research and advisory Mohd Sedek Jantan said the Fed looked unlikely to pivot anytime soon after the recent US inflation data showed a stronger-than-expected figure in September, dashing hopes for a slowdown of interest rate hikes.

“While any deviation from consensus could cause the dollar to fall temporarily, we do not think it would change the fact that markets are now pricing in a nearly 100% chance that the Fed will raise rates by 75 basis points in November, and any dollar weakness should be short-lived,” he told Bernama.

According to the US Bureau of Labor Statistics, the US consumer price index rose 0.4% from August and was up 8.2% on the year.

However, Mohd Sedek noted one thing the market should be concerned about was that while the Fed’s hawkishness was causing treasury yields and the dollar to overshoot, it would also increase the risks of a financial accident and recession if the Fed continued to hike rates.

“If a recession occurs in 2023, we expect the Fed to make a 180-degree turn and reduce policy rates to near zero,” he added.

Meanwhile, the ringgit was traded mostly lower against a basket of major currencies except for the Japanese yen.

The local currency fell against the British pound to 5.2870/5.2915 from 5.2291/5.2324 at yesterday’s close, depreciated vis-a-vis the euro to 4.5741/4.5780 from 4.5625/4.5654, and slipped versus the Singapore dollar to 3.3009/3.3042 from 3.2726/3.2752.

But, it strengthened against the Japanese yen to 3.1836/3.1867 from 3.1957/3.1980 yesterday.