Ringgit opens lower against greenback on stronger US data


KUALA LUMPUR – The ringgit weakened against the US dollar at the opening today, as the higher-than-expected United States (US) Producer Price Index (PPI) data released yesterday caused the greenback to appreciate against its counterparts, a dealer said.

At 9 am, the local note slipped to 4.2330/2380 against the greenback from 4.2300/2340 at Tuesday’s close.

ActivTrades trader Dyogenes Rodrigues Diniz said the PPI data, which showed an 0.8 per cent jump against the forecast of 0.5 per cent, measures inflation through the variation in the price of raw material used by producers.

“This PPI reading reaffirms the inflation situation in the US which could fuel its monetary policy in 2022,” he told Bernama.

Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit should stay weak during the day as the Federal Open Market Committee’s (FOMC) decision will be unveiled on Wednesday night.

“Despite news over Pfizer’s (antiviral COVID-19) pill Paxlovid, which is said to have a better efficacy rate, the markets are giving more weight on the major central bank decision this week and choose to prefer the US dollar as the Federal Reserve is expected to remain hawkish in their economic assessment,” he said.

Hence, he expects the ringgit to trade in a narrow range today.

At the opening bell, the ringgit was traded mostly higher against other major currencies.

The local note rose against the Singapore dollar to 3.0907/0946 from 3.0912/0946 at Tuesday’s close, appreciated versus the euro to 4.7685/7741 from 4.7803/7848 and climbed vis-a-vis the Japanese yen to 3.7213/7260 from 3.7239/7278.

However, the ringgit eased against the British pound to 5.6015/6081 from 5.5929/5982 previously.