A higher inflation rate would mean the monetary policy stance is likely to remain restrictive, and that could support the US dollar, says analyst.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US November CPI is expected to rise 3.1% from 3.0% in September based on consensus estimates.
“The core CPI is anticipated to remain at 3.0%. All in all, the inflation rate is expected to climb as the effect of the higher US import tariffs starts to creep in. Hence, this could complicate how the market sees the US Federal Reserve with respect to interest rate decisions going into next year,” he told Bernama.
He said a higher inflation rate would mean the monetary policy stance is likely to remain restrictive, and that could support the US dollar, noting that the US Dollar Index rose 0.09% to 98.457 points as market participants awaited the release of the US CPI.
At the close, the ringgit traded mostly lower against a basket of major currencies.
At 6pm, the ringgit climbed to 4.0840/4.0880 against the US dollar, from 4.0855/4.0940 at yesterday’s close, after having opened at the 4.07 level in the morning session.
It fell against the British pound to 5.4513/5.4567 from 5.4439/5.4553 at yesterday’s close, edged down against the euro to 4.7869/4.7915 from 4.7866/4.7965, but rose against the Japanese yen to 2.6188/2.6217 from 2.6267/2.6321.
The local currency also traded mostly lower against Asean peers.
It depreciated against the Singapore dollar to 3.1620/3.1653 from 3.1614/3.1682, weakened versus the Thai baht to 12.9750/12.9935 from 12.9657/12.9989, dipped against the Philippine peso to 6.97/6.98 from 6.96/6.97, but improved against the Indonesian rupiah to 244.2/244.5 from 244.7/245.3 previously. - FMT
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