Ringgit opens slightly lower on stronger US economic data
The local currency was weighed down by stronger-than-expected US economic data, which supported the greenback, says analyst.
KUALA LUMPUR, Sept 11 - The Malaysian ringgit started the day slightly weaker against the US dollar on Friday, as robust US economic data bolstered the American currency. By 8 am, the local currency traded at 4.0680/0745 against the greenback, down from yesterday's close of 4.0630/0670. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the dip to the US producer price index (PPI) soaring more than anticipated to 5.4% year-on-year in August, compared to July's 4.8%, exceeding consensus estimates of 5.3%.
The core PPI also increased to 4.6% from 4.3%, while the US Dollar Index (DXY) rose 0.26% to 99.077 points. Dr Rashid stated that businesses might transfer their escalating costs to consumers, potentially keeping consumer price index (CPI) levels high when announced later. This could fuel speculation of an imminent US interest rate hike, strengthening the US dollar and putting pressure on the ringgit.
Quintex Intel global strategist Stephen Innes noted that the stronger-than-expected PPI reading boosted the likelihood of a US Federal Reserve rate hike next week to about 75%, continuing to weigh on the ringgit amid weaker global equities and a shift toward defensive risk sentiment. Despite broader US dollar weakness, the ringgit maintained support from Bank Negara Malaysia's hawkish stance and relatively robust domestic economic indicators, driven by investment and export activity linked to the artificial intelligence boom.
The ringgit traded higher against most major currencies at opening, strengthening against the Japanese yen to 2.6337/6381 from 2.6431/6459, inching up against the euro to 4.7238/7313 from 4.7269/7315, and rising against the British pound to 5.4967/5055 from 5.5046/5100. Against regional currencies, the ringgit showed mixed performance, strengthening against the Singapore dollar to 3.2082/2136 from 3.2113/2148, gaining versus the Thai baht to 12.2696/2948 from 12.3331/3497, but remaining relatively stable against the Indonesian rupiah at 231.8/232.3 and slipping slightly against the Philippine peso to 6.50/6.52.
Written by urgent.news from Malay Mail's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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