Ringgit Strengthens On Softer US Data, But Slips Against Key Regional, Major Currencies
At 8am, the local note stood at RM4.2305/2405 versus the greenback, slightly firmer than Wednesday's close of RM4.2345/2370.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) dropped 0.47% to 98.631 points, following a softer inflation print from the world's largest economy.
'The short-term US Treasury fell as hope for interest rate cuts has gained momentum, with the two-year yield dropping seven basis points to 3.95%,' he told Bernama.
He added, 'It appears that expectations for rate cuts would be in the spotlight. The current US Federal Reserve (Fed) chairman's term ends next May. US President Donald Trump is likely to appoint a Fed chief who aligns with his agenda, that is, to prescribe further monetary easing.'
The US Consumer Price Index (CPI) rose 2.4% in May, slightly below market expectations of 2.5%, while the core CPI came in at 2.8%, missing the 2.9% consensus forecast.
Dr Afzanizam believes the DXY is likely to remain below the 100-point mark for some time, a trend that should favour emerging market currencies like the ringgit.
He expects the ringgit to continue trading with an upward bias, likely fluctuating within the RM4.22–RM4.23 range in the near term.
Despite its gains against the greenback, the ringgit traded lower against a basket of major currencies at the open.
The local currency weakened against the Japanese yen to 2.9344/9415 from 2.9187/9207, slipped vis-à-vis the British pound to 5.7399/7535 from 5.7166/7200, and fell against the euro to 4.8693/8808 from 4.8426/8454.
Among its ASEAN peers, the ringgit's performance was mixed.
It inched higher against the Indonesian rupiah at 260.1/260.8 from 260.4/260.6, and was unchanged versus the Philippine peso at 7.57/7.59. However, it slid against the Singapore dollar to 3.2953/3033 from 3.2925/2947, and weakened against the Thai baht to 12.9949/13.0333 from 12.9729/9870 previously. Related
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