KUALA LUMPUR: The ringgit continued to strengthen against the US dollar on Tuesday, revisiting the 4.63-level last seen in January this year on the back of rising optimism of US interest rate cut and domestic growth prospects.
At 8 am, the ringgit stood at 4.6330/6400 against the greenback from Monday's close of 4.6350/6375.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local currency demonstrated a positive trend as the US rate cut expectation gained momentum.
"The ringgit's positive trend has led to prospects for lower interest rate differentials between the Fed fund rate (5.50 per cent) and the overnight policy rate (3.00 per cent) at 2.50 per cent.
"The dollar-ringgit pair could range between RM4.63 and RM4.64 as markets adopt a wait-and-see attitude ahead of the Federal Open Market Committee meeting outcome tomorrow," he told Bernama, adding that he expects the ringgit to continue to trend higher as the current level is undervalued.
"My year-end target for the local unit has been revised to RM4.50 from RM4.65 versus the dollar," he said.
It was reported that the ringgit also emerged as the best-performing currency in the Asian market, while most of the other currencies steadied against the greenback.
Meanwhile, the local note traded firmer against a basket of major currencies.
The ringgit increased vis-a-vis the euro to 5.0115/0191 from 5.0225/0252 at Monday's close and strengthened versus the Japanese yen to 3.0129/0177 versus 3.0158/0176 previously.
However, it eased against the British pound to 5.9562/9652 from 5.9472/9504.
Against ASEAN currencies, it inched up against the Singapore dollar to 3.4492/4547 from 3.4499/4521 yesterday, advanced vis-a-vis the Thai baht to 12.8723/8993 from 12.8947/9063 previously.
The local note opened almost flat against the Indonesian rupiah at 284.5/285.1 from 284.6/284.9 at Monday's close and remained unchanged against the Philippine peso at 7.92/7.93.