Ringgit ends higher vs US dollar ahead of inflation data

 Market participants remained cautious ahead of the US CPI release, with July inflation expected to ease slightly to 3.4%, says analyst.

KUALA LUMPUR:

The ringgit finished higher against the greenback on Wednesday ahead of the release later tonight of the US Consumer Price Index (CPI) report for July, which is expected to provide further clues on the direction of interest rates in the US.

At 6pm, the ringgit rose to 4.0835/4.0875 versus the US dollar from yesterday’s close of 4.0905/4.0940.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that the ringgit was well supported against the US dollar today, while other Asian currencies were generally mixed against the greenback.

“Clearly, market participants were guarded today as the US CPI will be published tonight. Consensus estimates showed CPI inflation could come in at 3.4% in July versus 3.5% for June,” he told Bernama.

Afzanizam noted that economists were expecting a moderate US inflation rate for July.

“Still, in light of the elevated crude oil prices, higher-than-expected inflation could lead to a higher US dollar. For now, the US Dollar Index was rather flat at 99.855 points,” he added.

At the close, the local currency ended higher against a basket of major currencies.

It climbed against the Japanese yen to 2.5655/2.5682 from 2.5680/2.5703 at yesterday’s close and rose against the euro to 4.7107/4.7153 from 4.7188/4.7228. The ringgit improved vis-à-vis the British pound to 5.5180/5.5234 from 5.5238/5.5285 previously.

The local note was mostly higher against regional currencies.

It climbed against the Singapore dollar to 3.1905/3.1941 from 3.1930/3.1962 on Tuesday and appreciated against the Philippine peso to 6.67/6.68 from 6.68/6.69.

Against the Indonesian rupiah, it climbed to 228.4/228.7 against yesterday’s close of 229.0/229.3 but edged down against the Thai baht to 12.3488/12.3665 from 12.3323/12.3481. - FMT