The ringgit opened higher against the greenback for the third consecutive day, as the US dollar slipped following a surprising decline in the US producer price index (PPI) in March, said an analyst.
At 9am on Friday (April 14), the local note had risen to 4.3880/3915 versus the US dollar, from Thursday’s closing rate of 4.3995/4025.
The US dollar index, which measures the greenback against six major peers, fell by 0.47% to 101.01 points, as the PPI for March dropped to 2.7%, from 4.6% in February.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said initial jobless claims in the US also rose to 239,000 last week, beating the consensus estimate (232,000) and surpassing the previous week’s level (228,000).
“Such data points indicate that the case for a pause in the US Federal Reserve’s (Fed) rate hikes has gained more credence.
“Major currencies such as the euro, sterling and yen also rose against the greenback, and the ringgit could also gain some grounds versus the US dollar today (Friday),” he told Bernama.
As such, Mohd Afzanizam anticipates the ringgit to hover around 4.39 against the US dollar, with the current support level at 4.3466 and resistance at 4.4236.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz opined that the greenback’s decline followed the US consumer price index (CPI) data, which came in below expectations at 5.0% against the forecast of 5.2%.
“The CPI measures inflation in the US, and a lower-than-expected reading shows that the Fed’s inflation control measures are having the desired effect, which is to cool down the economy.
“As such, the Fed may adopt a more lenient monetary policy in the coming months,” said Diniz, adding that the PPI data further confirmed that inflation is slowing in the US.
However, the ringgit traded mostly lower against a basket of major currencies, except against the pound, where it rose to 5.4951/4995 from 5.5047/5084 at Thursday’s close.
The local note eased to 4.8509/8548 from 4.8500/8533 vis-a-vis the euro, and depreciated against the yen at 3.3095/3123, compared with 3.3034/3059 on Thursday. At the same time, the local note was traded higher against Asean currencies.
It improved against the Indonesian rupiah at 297.50/297.90 from 298.3/298.7 at the close on Thursday, and went up versus the baht to 12.8695/8862 from 12.8942/9083 previously.
The ringgit also increased against the Singapore dollar at 3.3112/3143 from 3.3194/3219 at Thursday’s close, and inched up against the Philippine peso at 7.94/7.96 from 7.96/7.97 previously.
