Kuala Lumpur: The ringgit opened slightly higher against the US dollar today amid subdued investor sentiment as economic data from the United States (US) came in slightly better than expected.
According to analysts, this has provided minor relief from US inflationary pressure and created a risk-off situation in the financial markets.
At 8am, the ringgit traded at 4.4950/5045 against the greenback, compared with 4.4970/5010 at yesterday’s close.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said inflation in the US, measured by the change in the consumer price index (CPI), came within expectations of 2.9 per cent, while the core CPI was a lower-than-expected 3.2. percent versus the consensus estimate of 3.3 percent.
“The latest CPI results have rekindled hopes that the US Federal Reserve (Fed) is on track to cut interest rates this year.
“Meanwhile, the 10-year US Treasury yield fell 14 basis points to 4.65 percent and the US dollar index (DXY) fell to 109.083 points,” he told Bernama.
On that note, Mohd Afzanizam said the ringgit could outperform today and hover around RM4.48-RM4.49.
Stephen Innes, managing partner at SPI Asset Management, said US CPI data came in better than expected, recording a modest relief in inflation pressures, with the core print slightly lower than expected.
“This has given the Treasury market a brief window to test lower yields. However, I doubt this bond relief rally will extend.
“A few small hits to inflation expectations are not enough to change the situation, especially as the new administration is poised to take the US economy to even hotter levels,” he said.
Innes said traders in the foreign exchange market seized on the dollar’s momentary decline to strengthen their positions, anticipating more volatility as US Inauguration Day approaches.
Meanwhile, the ringgit had a mixed start against major currencies.
It strengthened against the euro to 4.6276/6374 from 4.6364/6405 yesterday, but fell against the Japanese yen to 2.8768/8831 from 2.8656/8685 and weakened against the British pound to 5.5023/5140 from 5.4949 on Wednesday. /4998.
Similarly, the local note traded mixed against ASEAN currencies, rising against the Singapore dollar to 3.2897/2971 from 3.2909/2943 at Wednesday’s close, and the Indonesian rupiah to 275.3/276.0 from yesterday’s 275.4/275.8. But reached. Closing.
However, its value against the Thai baht declined to 13.0022/0388 from 12.9503/9682 yesterday and traded flat against the Philippines peso at 7.67/7.69.
