Expectations of the Fed's interest rate cut raised, and the ringgit rebounded to the 4.73 level

The economic data recently released by the US was mixed. Coupled with the recently concluded Federal Open Market Committee (FOMC) meeting, it was revealed between the lines that interest rates would not be raised again, raising investors' expectations that the Federal Reserve would cut interest rates, and the ringgit rose to 4.7327 against the US dollar.

Mohd Afchaniza, chief economist at Muamalat Bank of Malaysia, believes that US Treasury yields have continued to fall since the FOMC met this week, which indicates that expectations of US interest rate cuts are increasing.

He pointed out, $U.S. 2-Year Treasury Notes Yield(US2Y.BD)$US two-year Treasury yields fell 9 basis points to 4.87%; while $USD(USDindex.FX)$The US dollar index also fell 0.43% to 105.499 points.

He said that the current signs suggest that the ringgit and other emerging currencies are expected to rebound further today.

Regarding US economic data, he pointed out that investors are currently digesting a series of economic data released by the US, while still waiting for non-farm payrolls data and unemployment data before taking further action.

The US manufacturing industry contracted in April, the ISM manufacturing PMI fell below 50 levels to 49.2, job vacancies fell to a new low in 3 years, and the number of people leaving jobs declined, indicating that demand for labor began to slow down.

However, there are still some strong economic data, which has extinguished some expectations of interest rate cuts, including the number of initial jobless claims in the US still remaining resilient, and the increase in the number of people employed in private enterprises, which have exceeded expectations.

The ringgit strengthened across the board

As soon as the market opened this morning, the ringgit rose against a basket of major currencies, including the euro and the British pound, but declined slightly against the yen.

Notably, there was an influx of foreign capital of about 9 million US dollars (about RM42.65 million) into the Malaysian stock market on Thursday, and this has also indirectly driven the Composite Index to strengthen today and continue to move towards the 1,590 mark.

$FTSE Bursa Malaysia KLCI Index(.KLSE.MY)$The FTSE Composite Index closed at 1589.59 points today, starting at 9.29 points or 0.59% throughout the day.

As of 6 p.m., $USD/MYR(USDMYR.FX)$The MYR is at the level of 4.7387 against the US dollar, starting at 0.33%; at the same time $SGD/MYR(SGDMYR.FX)$The MYR was reported at the 3.504 level against the SGD, starting at 0.21%.