Ringgit makes further gains at the close against US dollar

 

KUALA LUMPUR: The ringgit made additional gains against the US dollar at the close today as the greenback weakened after the release of the US Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) meeting minutes, analysts said.

At 6pm, the local note rose to 4.3995/4.4025 versus the greenback from Wednesday’s closing rate of 4.4065/4.4120.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the ringgit was stronger against the greenback today as the latest print for the US CPI was seen as ringgit positive as thoughts of a pause by the US Federal Reserve (US Fed) gained momentum.

Afzanizam said the US dollar was also weaker against major currencies such as the euro, the British pound and the Japanese yen, leading to a lower US Dollar Index, falling 0.2% to 101.297 points.

However, he said markets are still digesting the latest CPI print in the US and the FOMC meeting minutes, which showed that the US Fed staff see a possibility of a mild recession later this year.

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“Going forward, we may see some Fed members continue to argue whether the Fed Fund Rate should be higher or otherwise.

“However, the sharp increase in the Fed Fund Rate of 475 basis points since last year will certainly impact growth and inflation. It is a question of when and how severe. In that sense, I believe the currency market would continue to trade in a cautious mode,” he told Bernama.

SPI Asset Management managing director Stephen Innes said a better-than-expected US March CPI reading is the latest sign that inflation could moderate and might prompt further dovish discussion of the Fed’s path from here.

US headline inflation fell more than expected while the core held relatively steady, he noted.

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

It dropped vis-a-vis the euro to 4.8500/4.8533 from 4.8159/4.8219 at Wednesday’s close, was lower versus the British pound to 5.5047/5.5084 from 5.4716/5.4784 and depreciated against the Japanese yen to 3.3034/3.3059 compared with 3.2943/3.2987 yesterday.

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Against Asean currencies, the local note was also mostly lower.

It declined against the Indonesian rupiah at 298.3/298.7 from 296.0/296.6 on Wednesday and went down versus the Thai baht to 12.8942/12.9083 from 12.8657/12.8874 previously. - FMT