Ringgit strengthens amid softer US inflation, easing yields

 While long-term US interest rates remain elevated, markets are starting to reassess the inflation outlook, says analyst.

KUALA LUMPUR:

 The ringgit closed firmer against the US dollar today, supported by improved risk sentiment following a lower-than-expected US inflation reading and easing US Treasury yields.

SPI Asset Management managing partner Stephen Innes said the Malaysian ringgit strengthened today after US yields eased following a softer-than-expected April inflation report, giving room for Asian currencies, including the ringgit, to recover.

“While long-term US interest rates remain elevated, markets are starting to reassess the inflation outlook, as the expected price pressures from recent tariff announcements have yet to materialise.

“US president Donald Trump’s new import tariffs were expected to trigger a near-term price spike, but April’s inflation data showed no notable increases in the categories likely to be affected,” he told Bernama.

He noted that the foreign exchange market was subdued today, with movements largely driven by external factors rather than domestic developments.

At 6pm, the local currency appreciated to 4.2840/4.2910 versus the greenback compared to yesterday’s close of 4.3185/4.3250.

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

It declined against the Japanese yen to 2.9373/2.9425 from 2.9181/2.9227, fell against the euro to 4.8204/4.8282 from 4.7961/4.8033 and dropped against the British pound to 5.7191/5.7285 from 5.7056/5.7142 previously.

The local currency was traded higher against its Asean peers.

It climbed versus the Singapore dollar to 3.3045/3.3104 from 3.3084/3.3137 yesterday, rose against the Indonesian rupiah to 258.6/259.2 from 259.7/260.2 and surged against the Thai baht to 12.8920/12.9208 from 12.9958/13.0240. It advanced against the Philippine peso to 7.66/7.68 from 7.74/7.76. - FMT