KUALA LUMPUR, June 15 — The ringgit continued its downtrend momentum against the US dollar today, in line with regional currencies’ performance amid the hawkish stance of the US Federal Reserve (Fed), said an analyst.

At 6pm, the local note finished at 4.6235/6280 against the greenback from 4.6195/6235 at yesterday’s close.

SPI Asset Management managing partner Stephen Innes said the market was prepared for a Fed pause and guidance to one additional 25 basis points hike in June, but the Fed changed its guidance higher to 50 basis points, implying two hikes.

“That guidance was more hawkish than what the market expected, and in turn, the US dollar strengthened against the ringgit. But after the initial hawkish shock is digested, the market will place more weight on economic data and inflation metrics rather than the Fed guidance.

“And with US inflation expected to head lower this summer, I think the US dollar could weaken a tad, and we could be nearing peak ringgit weakness, especially with China now stimulating the local economy, which should boost Malaysian exports to China,” he told Bernama.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the projected Fed Fund Rate of 5.6 per cent by year-end from the previous forecast of 5.1 per cent suggested that the Fed would remain hawkish on their monetary policy stand.

“This may have contributed to the strength of the US dollar today,” he added.

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

It advanced against the Japanese yen to 3.2781/2816 from 3.3015/3046 but depreciated versus the British pound to 5.8543/8600 from 5.8423/8473 yesterday, and fell vis-a-vis the euro to 5.0151/0200 from 4.9918/9962 yesterday.

However, the local note traded mixed against other Asean currencies.

The ringgit improved against the Thai baht to 13.2783/2981 from yesterday’s 13.3192/3380 but eased against the Singapore dollar to 3.4442/4481 against 3.4433/4465 yesterday.

It was slightly higher versus the Indonesian rupiah at 309.1/309.6 from 309.8/310.3 but remained unchanged against the Philippine peso at 8.26/8.27. — Bernama