KUALA LUMPUR, Sept 11 — The ringgit opened slightly lower against the US dollar today, weighed down by stronger-than-expected US economic data that supported the greenback.
At 8 am, the local currency eased to 4.0680/0745 against the greenback from Thursday’s close of 4.0630/0670.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US producer price index (PPI) rose more than expected to 5.4 per cent year-on-year in August, up from 4.8% in July and above the consensus estimate of 5.3 per cent.
Meanwhile, core PPI also rose to 4.6 per cent from 4.3 per cent previously, while the US Dollar Index (DXY) increased 0.26 per cent to 99.077 points.
“It seems businesses are inclined to pass on their rising costs to consumers, which means that the consumer price index (CPI) could stay elevated when it is published tonight.
“Hence, the potential US interest rate hike thesis is gaining momentum, leading to a higher US dollar,” he told Bernama.
Meanwhile, Quintex Intel global strategist Stephen Innes said the stronger-than-expected PPI reading had pushed the probability of a US Federal Reserve rate hike next week to around 75 per cent.
He said this continued to put some pressure on the ringgit, particularly as global equities weakened and broader risk sentiment turned defensive.
“Against the broader US dollar, I would not expect the ringgit to weaken too dramatically.
“It continues to draw support from a more hawkish Bank Negara Malaysia and relatively resilient domestic economic indicators, benefiting from investment and export activity linked to the artificial intelligence boom,” he added.
The ringgit traded higher against most major currencies at the opening.
It gained against the Japanese yen to 2.6337/6381 from yesterday’s close of 2.6431/6459, inched up against the euro to 4.7238/7313 from 4.7269/7315, and rose against the British pound to 5.4967/5055 from 5.5046/5100.
Against regional currencies, the ringgit traded mixed.
It strengthened against the Singapore dollar to 3.2082/2136 from 3.2113/2148 at the previous close and gained against the Thai baht to 12.2696/2948 from 12.3331/3497.
However, the local note was little changed against the Indonesian rupiah at 231.8/232.3 from 231.5/231.8, while it slipped against the Philippine peso to 6.50/6.52 from 6.49/6.50 previously.
