KUALA LUMPUR, Aug 10 — The ringgit ended marginally higher against the US dollar today, taking the cue from the Chinese yuan which rose sharply on more support from the People’s Bank of China.
The greenback also remained firm ahead of the United States (US) inflation data due later today, an analyst said.
At 6pm, the local note rose to 4.5690/5720 against the US dollar compared with 4.5705/5755 at the close Wednesday.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the ringgit moved in a tight range today versus the greenback.
He noted that China’s economy continues to be in the limelight with the recent contraction in trade data and negative consumer price index (CPI) print indicating that the country needs economic stimulus in order to grow at a sustainable pace in the second half of 2023.
“Tonight, the focus will be on the US CPI which is expected to increase slightly to 3.3 per cent in July from three per cent in the previous month, while the core CPI is likely to maintain at 4.8 per cent.
“In some sense, there appears to be concern over the global growth prospects which necessitate an accommodative monetary policy. Whatever the case may be, risk-off mode could lead to higher demand for the US dollar,” he told Bernama.
Meanwhile, SPI Asset Management managing partner Stephen Innes said that the ringgit closed with little change as traders refrained from expressing a strong opinion in anticipation of the US CPI release.
“However, I believe that the market is currently favouring a more natural approach. While higher oil prices usually benefit the ringgit, this may not be the case if it results in increased US yields.
“As a result, we may witness a clash between rising energy prices and higher US yields, particularly if the US inflation data exceeds expectations,” he said.
Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.
It eased vis-a-vis the British pound to 5.8296/8334 from 5.8187/8251 on Wednesday, weakened versus the euro to 5.0350/0383 from 5.0175/0230, but rose against the Japanese yen to 3.1760/1783 from 3.1897/1934 previously.
At the same time, the local unit traded higher against other Asean currencies.
The ringgit strengthened versus the Singapore dollar to 3.3948/3975 from 3.3979/4021 at Wednesday’s close and improved against the Indonesian rupiah to 300.8/301.2 from 300.9/301.3 yesterday.
It gained vis-a-vis the Philippine peso to 8.12/8.13 from 8.13/8.14 on Wednesday and rose against the Thai baht at 13.0112/0264 from 13.0791/0998 previously.
— Bernama
