Ringgit drops to new all-time low against the US dollar

The local note also traded mostly lower against other major currencies

THE ringgit depreciated to a fresh all-time low against the US dollar at the opening today, due to the higher-than-expected reading of the US Consumer Price Index (CPI) data, which signals that a significant increase in the US interest rate might be on its way, a dealer said.

At 9am, the local currency slid to 4.6920/6965 against the greenback from yesterday’s close of 4.6910/6940.

According to international news reports, the CPI rose to 8.2% in September compared to the forecast of 8.1%.

ActivTrades trader Dyogenes Rodrigues Diniz said experts predict the interest rate to end the year between 4.5% and 4.75%.

“The interest rate is at 3.25% now and there are still two more Federal Reserve meetings in November and December, with the possible increase of 0.75% next month and another 0.74% in December,” he said in a note today.

From the technical point of view, he said the US dollar/ringgit is currently holding a reading of 90.9 on the Relative Strength Index indicator, which shows an extreme overbought situation and a breakout below 4.6400 could make room for a more important drop in the coming days.

Meanwhile, the ringgit traded mostly lower against a basket of major currencies.

The local note shrank against the British pound to 5.3052/3103 from 5.2291/2324 from yesterday’s close, slipped vis-a-vis the euro to 4.5831/5875 from 4.5625/5654 and slid versus the Singapore dollar to 3.2963/2997 from 3.2726/2752 yesterday.

However, it appreciated against the Japanese yen to 3.1843/1877 from 3.1957/1980 previously. – Bernama / pic Muhd Amin Naharul