Ringgit opens higher against major currencies, ease vs US dollar

The Malaysian ringgit started the day on a positive note against major currencies but weakened against the US dollar on Thursday. This was due to a slowdown in the highly anticipated US consumer price index (CPI). At 8am, the local currency slipped to 4.0850/0950 against the greenback, down from yesterday's closing rate of 4.0835/0875.

Dr Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia, pointed out that the US CPI inflation moderated slightly to 3.4% in July, from 3.5% a month prior, meeting expectations. The 10-year US Treasury yields fell below 4.70%, suggesting the inflation premium was easing. However, the two-year note yield dropped by just one basis point to 4.20%, implying the Federal Reserve may not be in a hurry to raise interest rates.

The ringgit's performance was also influenced by concerns over the reopening of the Strait of Hormuz, which could potentially mean a higher risk of inflation. Analysts expect the ringgit to fluctuate within the range of RM4.07 to RM4.09 against the US dollar today.