KUALA LUMPUR – The ringgit continued to strengthen against the greenback and other major currencies ahead of the second quarter (Q2) 2024 gross domestic product release tomorrow, an analyst said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said growing anticipation of US interest rate cuts has also bolstered the ringgit.
At 8am, the ringgit inched up to 4.4150/4250 against the greenback from yesterday’s close of 4.4170/4235.
He said the disinflationary trend remains evident in the US, with the Consumer Price Index (CPI) in July coming in lower at 2.9%, against consensus estimates of 3.0%.
Additionally, the core CPI moderated to 3.2% from 3.3% in the previous month.
“Hence, the coast is clear for the Federal Reserve to initiate its monetary easing campaign next month.
“The shift in focus from containing inflation to preserving growth will be the main narrative going forward,” he said.
As anticipation of US rate cuts gains momentum, Afzanizam said the ringgit could appreciate against the US dollar, potentially nearing its immediate support level of RM4.4005 today.
At the opening, the ringgit traded higher against a basket of major currencies.
It rose against the Japanese yen to 2.9969/3.0041 from 3.0027/0073 at yesterday’s close, strengthened against the British pound to 5.6618/6746 from 5.6754/6838, and improved against the euro to 4.8618/8728 from 4.8684/8756 previously.
Meanwhile, the ringgit traded mixed against Asean currencies.
The local note gained against the Singapore dollar to 3.3526/3604 from 3.3582/3634 at yesterday’s close and rose against the Thai baht to 12.5744/6097 from 12.6351/6578 previously.
However, it was little changed against the Indonesian rupiah at 281.6/282.4 from 281.7/282.3 yesterday and remained flat against the Philippine peso at 7.75/7.77. – August 15, 2024