KUALA LUMPUR, March 23 — The ringgit closed weaker against the US dollar today as the hawkish stance by the United States (US) Federal Reserve (Fed) boosted the greenback, taking a toll on emerging market currencies.

At 6pm, the local currency fell to 4.2220/2255 versus the greenback from 4.2160/2190 at yesterday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Fed chair, Jerome Powell‘s statement that the US central bank would increase the interest rate by 50 basis points in the upcoming Federal Open Market Committee meeting is supporting the dollar.

"Meanwhile, the US Treasury yield curve has flattened, signalling that the bond market has become increasingly wary about the country’s growth prospect, hence the US monetary policies are expected to be more restrictive going forward,” he told Bernama.

ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar’s uptrend will continue following Powell’s statement that the central bank will use all the tools at its disposal to maintain price stability in the economy due to a higher-than-expected US inflation.

"From the technical point of view, as the US dollar has managed to break above 4.2050 against the ringgit, it is now likely to move up to 4.2450 over the next few days.

"Resistance at 4.2450 is important, and the price may pull back a bit after touching this area. A break above 4.2450 could pave the way for the greenback to rally to as high as 4.2900 in a couple of months against ringgit,” he added.

At the close, the ringgit was also traded lower against a basket of major currencies.

The local unit fell against the Singapore dollar to 3.1094/1122 from 3.1027/1052 on Tuesday and slipped against the British pound to 5.5849/5895 from 5.5580/5619 previously.

The ringgit had also eased vis-a-vis the yen to 3.4893/4924 from yesterday’s close of 3.4880/4908, and depreciated versus the euro to 4.6446/6485 from 4.6346/6379 yesterday. — Bernama