Ringgit closes lower despite weaker US CPI data

 

KUALA LUMPUR: 

The ringgit ended lower against the US dollar at the close despite the weaker US Consumer Price Index (CPI) data released last night, indicating that lower inflation will enable the US Federal Reserve to reduce interest rates.

The US CPI in July came in lower at 2.9% on a yearly basis from 3% in June.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the ringgit has gained considerably against the greenback ever since signals for the rate cut in the US gained momentum.

Yesterday, the ringgit closed at its strongest level in 16 months after it revisited the 4.41 level.

“Plus, the anticipation for a strong second quarter 2024 (Q2 2024) gross domestic product (GDP) in Malaysia, to be announced tomorrow, has resulted in traders being more sanguine on the prospect of further appreciation in the ringgit.

Nonetheless, currency movement is not linear and is subject to market volatility as traders might want to realise some profits,

 he told Bernama.

At 6pm, the ringgit slid to 4.4350/4.4405 versus the greenback from yesterday’s close of 4.4170/4.4235.

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

It went down versus the Japanese yen to 3.0092/3.0132 from 3.0027/3.0073 at yesterday’s close, depreciated against the British pound to 5.7007/5.7078 from 5.6754/5.6838 and weakened vis-a-vis the euro to 4.8838/4.8899 from 4.8684/4.8756 previously.

Meanwhile, the ringgit traded lower against Asean currencies.

The local note dropped versus the Singapore dollar to 3.3657/3.3699 from 3.3582/3.3634 at yesterday’s close and was lower against the Philippine peso at 7.79/7.80 compared with 7.75/7.77 previously.

It also declined versus the Indonesian rupiah to 282.5/282.9 from 281.7/282.3 yesterday and slipped vis-a-vis the Thai baht to 12.6805/12.7013 from 12.6399/12.6668 previously. - FMT