KUALA LUMPUR: The ringgit strengthened further against the US dollar yesterday, tracking a weaker greenback after US inflation data came in below expectations.
At 8am, the local note rose to 4.2115/2285 against the greenback from Tuesday’s close of 4.2290/2320.
The gains followed a 0.43 per cent drop in the US Dollar Index (DXY) to 98.097, after July’s headline US inflation rate eased to 2.7 per cent.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the softer reading — driven largely by a moderation in Owner’s Equivalent Rent (OER) to 4.1 per cent from 4.2 per cent — reinforced expectations of a US interest rate cut.
OER, which accounts for about a quarter of the Consumer Price Index (CPI) weightage, had been steady for two months prior.
“The US benchmark equity indices climbed over one per cent, while the two-year US Treasury yield fell four basis points to 3.73 per cent. This signals that the lower-than-expected inflation has strengthened rate cut bets, fuelling the equities rally,” he told Bernama, adding that the USD/MYR is expected to trade between RM4.20 and RM4.23 in the near term.
The ringgit was mixed against major currencies, easing to 2.8502/8619 against the Japanese yen (from 2.8490/8512) and to 4.9182/9380 against the euro (from 4.9090/9125), but firming to 5.6876/7106 versus the British pound (from 5.6905/6946).
It traded higher against most regional peers, gaining to 3.2825/2960 against the Singapore dollar, 12.9965/13.0570 versus the Thai baht, 258.5/259.6 against the Indonesian rupiah, and 7.38/7.41 against the Philippine peso. – BERNAMA
