4 days ago
Soft US Inflation Lifts Ringgit To Three-Day High
The ringgit climbed for a third straight day against the US dollar on Wednesday, buoyed by a weaker greenback after headline US inflation came in below expectations. The US Dollar Index (DXY) slipped 0.43% to 98.097.
At 8am, the local note opened at RM4.2115/2285 against the dollar, improving from Tuesday's close of RM4.2290/2320. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the currency is likely to stay supported, with the US dollar-ringgit pair expected to hover between RM4.20 and RM4.23 amid a high probability of a US interest rate cut.
He said the softer July inflation reading of 2.7% was largely driven by a moderation in the Owner's Equivalent Rent (OER) to 4.1% after holding at 4.2% for two consecutive months. OER accounts for roughly 25% of the Consumer Price Index's weightage.
'The US benchmark equity indices rose more than 1%, while the yield on the two-year US Treasury note eased by four basis points to 3.73%,' he said, adding that the lower-than-expected headline inflation has strengthened rate cut bets and fuelled Wall Street's rally.
Against major currencies, the ringgit was mixed at the opening. It weakened to 2.8502/8619 versus the Japanese yen from 2.8490/8512 and slipped to 4.9182/9380 against the euro from 4.9090/9125. However, it edged higher against the British pound to 5.6876/7106 from 5.6905/6946.
The local note fared better versus regional peers, rising to 3.2825/2960 against the Singapore dollar from 3.2867/2893 and strengthening to 12.9965/13.0570 against the Thai baht from 13.0135/0300. It also advanced to 258.5/259.6 versus the Indonesian rupiah from 259.6/259.9 and improved to 7.38/7.41 against the Philippine peso from 7.41/7.42.
