Ringgit marginally down ahead of this week’s US CPI data

 

KUALA LUMPUR: The ringgit was marginally down against the US dollar at today’s close despite weaker-than-expected US non-farm payroll data published last Friday, according to an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said: “This would further increase the appeal of the US dollar as the US interest rates are expected to remain high relative to other major central banks across the globe”.

He added that China’s consumer price index (CPI) was flat in June year-on-year, the lowest level since February 2021, suggesting that the world’s second-largest economy would have more room to use monetary policy to support the economy.

SPI Asset Management managing director Stephen Innes stated that Asian foreign exchange traders are remaining cautious about selling the US dollar in anticipation of this week’s US CPI.

There are concerns that the persistent core inflation could strengthen the greenback through higher US interest rates, as the Federal Reserve (Fed) is considering using higher rates to tame inflation.

“Hence, they remain reluctant to sell their US dollar holding until the Fed signals a definitive pause in interest rates,” he said.

At 6pm, the local currency stood at 4.6685/4.6725 against the greenback compared with 4.6655/4.6675 at Friday’s close.

The ringgit traded lower against a basket of major currencies at today’s close.

It declined vis-a-vis the euro to 5.1176/5.1220 from 5.0765/5.0787 at Friday’s close, slipped against the Japanese yen to 3.2761/3.2792 from 3.2601/3.2617 and weakened against the British pound to 5.9785/5.9836 from 5.9466/5.9492.

The local currency traded mixed against other Asean currencies.

The ringgit was down versus the Singapore dollar at 3.4612/3.4644 from Friday’s close of 3.4511/3.4528 and weakened against the Thai baht to 13.2790/13.2961 from 13.2471/13.2588.

However, the ringgit rose against the Indonesian rupiah to 306.9/307.4 from 308.0/308.3 and was almost flat against the Philippine peso at 8.38/8.39 from 8.39/8.39. - FMT