The ringgit extended its gains against the US dollar at Thursday’s opening as softer-than-expected US economic data fuelled expectations that the Federal Reserve may delay further interest rate hikes, Bernama reported.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) fell 0.43% to 100.485 after the US Producer Price Index (PPI) unexpectedly declined 0.3% month-on-month in June, against market expectations for no change.
He said lower energy prices following the ceasefire between the United States and Iran contributed to the decline in producer prices.
Mohd Afzanizam added that Federal Reserve chairman Kevin Warsh’s testimony before the Senate Banking Committee also suggested the US central bank was unlikely to rush into raising interest rates.
“That should lend support to emerging market currencies, including the ringgit, as both the consumer price index (CPI) and PPI eased in June due to lower oil prices,” he told Bernama.
He expects the local currency to trade within the 4.06 to 4.08 range against the US dollar today.
At 8am, the ringgit strengthened to 4.0655/0710 against the greenback from Wednesday’s close of 4.0760/0805.
Against a basket of major currencies, the local note was mixed. It appreciated against the Japanese yen to 2.5083/5119 from 2.5103/5132 previously, but weakened against the British pound to 5.5039/5113 from 5.4578/4638 and slipped versus the euro to 4.6631/6694 from 4.6536/6587.
The ringgit also traded mostly firmer against regional currencies. It strengthened against the Indonesian rupiah to 225.0/225.4 from 225.5/225.9, rose against the Philippine peso to 6.59/6.60 from 6.61/6.62 and appreciated against the Thai baht to 12.1055/1280 from 12.1198/1371.
However, it edged lower against the Singapore dollar, trading at 3.1552/1600 compared with 3.1546/1583 at Wednesday’s close.
