Ringgit opens higher against US dollar on rising hopes fed will not hike rates

The ringgit opened higher against the greenback as the latest US inflation data strengthened hopes that the US Federal Reserve (Fed) would hold interest rates.

At 9.05 am, the local note rose to 4.6750/6800 against the greenback from Wednesday’s close of 4.6785/6835.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the US “core inflation rate matched the consensus forecast of 4.3 per cent and was lower than the previous month’s 4.7 per cent.”

“This indicates that the underlying inflationary pressures have gradually eased, setting the stage for a likely unchanged stance (in US interest rates).

“However, the US headline inflation for August was higher than expected at 3.7 per cent year-on-year, up from the previous month’s 3.2 per cent, surpassing the consensus estimate of 3.6 per cent,” he told Bernama.

Consequently, he said the market can anticipate some positive movement in the ringgit today, given that the exchange rate has already reached an oversold position from a technical perspective.

The ringgit was traded mixed against a basket of major currencies.

It depreciated against the Japanese yen to 3.1781/1817 from 3.1742/1778 on Wednesday’s close and fell against the British pound to 5.8433/8495 from 5.8308/8370 and was unchanged against the euro at 5.0200/0254.

The local note also traded mixed against other Asean currencies.

It ticked down vis-à-vis the Singapore dollar to 3.4385/4427 from 3.4358/4400 at Wednesday’s close and was lower versus the Thai baht to 13.1011/1203 from 13.0809/1003.

It appreciated against the Indonesian rupiah to 304.1/304.6 from 304.3/304.8 from the previous day’s close and was unchanged against the Philippine peso at 8.24/8.26. — BERNAMA