KUALA LUMPUR – The ringgit resumes its uptrend against the greenback in light of the possible rate cut in the United States (US) amid improving data points locally, said an analyst.
At 8am, the ringgit rose to 4.4380/4500 versus the US dollar from yesterday’s close of 4.4440/4505.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit’s performance has been quite sanguine amidst the anticipation of a better gross domestic product (GDP) data for the second quarter of 2024 (2Q 2024) to be announced this Friday.
On the US producer price index (PPI), Mohd Afzanizam said it came in lower than expected at 2.2% in July against consensus estimates of 2.3% and 2.7% in the previous month.
Meanwhile, core PPI also dropped to 2.4% from 3.0% previously.
“Such an outturn indicates that disinflationary trend is ongoing and soon, inflation would reach the Federal Reserve’s policy target of 2.0%,” he told Bernama.
Consequently, the US Dollar Index (DXY) declined by 0.50% to 102.624 points while the 2- and 10-year US treasury yields dropped nine and six basis points to 3.93% and 3.84% respectively, he said.
On that note, the ringgit versus US dollar could be moving towards its support level of RM4.40, he said.
Meanwhile, the ringgit traded lower against a basket of major currencies.
It fell vis-a-vis the euro to 4.8796/8928 from 4.8520/8591 at yesterday’s close, slipped against the Japanese yen to 3.0193/0278 from 3.0053/0099 and it depreciated versus the British pound to 5.7095/7249 from 5.6839/6922 previously.
The ringgit traded mixed against Asean currencies.
The local note was marginally higher versus the Indonesian rupiah to 280.3/281.1 from 280.6/281.1 and firmer against the Philippine peso to 7.79/7.81 from 7.80/7.81 previously.
However, it declined against the Singapore dollar to 3.3693/3786 from 3.3590/3642 and dropped vis a vis the Thai baht to 12.6655/7081 from 12.6351/6578 previously. – August 14, 2024