Ringgit extends gains vs US dollar at opening

by BERNAMA / pic by TMR FILE

KUALA LUMPUR – The ringgit extended its gains against the US dollar at the opening on Thursday as the rising inflation rate had further weakened the greenback, a dealer said.

At 9.01 am, the local currency was trading at 4.1725/1765 against the US dollar compared with 4.1845/1860 at yesterday’s close.

ActivTrades trader Dyogenes Rodrigues Diniz said the United States (US) Consumer Price Index (CPI) data pointed to the highest inflation rate in 39 years, putting the US Federal Reserve under pressure to start raising interest rates.

“Although higher inflation would normally lead to the appreciation of the US dollar, the opposite has in fact happened and this is due to the fact that the market had already priced in strong inflation,” he told Bernama.

Technically, Diniz noted that the fall in the US dollar is unlikely to hold for much longer and the price could find support near the 4.1650-region.

“If it stabilises around this level, it could go up to the 4.2400 level within a few days,” he added.

Meanwhile, at the opening, the ringgit was traded lower against a basket of major currencies.

The local unit eased versus the Singapore dollar to 3.0992/1027 from 3.0976/0989 at Wednesday’s close and slipped against the Japanese yen to 3.6397/6435 from 3.6280/6296.

It also fell against the euro to 4.7746/7792 from 4.7565/7582 yesterday, and weakened vis-a-vis the British pound to 5.7197/7251 from 5.7043/7064 previously.