Kuala Lumpur: The ringgit continues to strengthen against the greenback on Thursday, amid weaker United States (US) economic data, an analyst said. At 8 am, the local currency inched up to 4.2305/2405 against the dollar versus the previous day's close of 4.2345/2370.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) slid 0.47 percent to 98.631 points as the US inflation rate came in lower than expected. The US Consumer Price Index (CPI) recorded 2.4 percent in May against consensus estimates of 2.5 percent, while the core CPI was 2.8 percent versus 2.9 percent in the consensus survey.
Dr Mohd Afzanizam highlighted that short-term US Treasury yields fell, with hopes for interest rate cuts gaining momentum. The two-year yield dropped seven basis points to 3.95 percent. He mentioned the possibility of rate cuts being a focal point, especially with the current US Federal Reserve (Fed) chairman's term ending next May. US President Donald Trump may appoint a Fed chief who aligns with his agenda for further monetary easing.
The DXY is likely to remain below 100 points for the foreseeable future, benefiting emerging market currencies, including the ringgit. Dr Mohd Afzanizam anticipates the ringgit to trade on an upward trend, ranging between RM4.22 and RM4.23.
At the opening, the ringgit showed mixed performance against a basket of major currencies. It depreciated against the Japanese yen to 2.9344/9415 from 2.9187/9207, weakened versus the British pound to 5.7399/7535 from 5.7166/7200, and fell against the euro to 4.8693/8808 from 4.8426/8454 previously.
Meanwhile, the local currency traded mostly lower against its ASEAN peers. It edged up against the Indonesian rupiah to 260.1/260.8 from 260.4/260.6 at Wednesday's close and remained unchanged against the Philippine peso at 7.57/7.59. However, it slid versus the Singapore dollar to 3.2953/3033 from 3.2925/2947 and declined against the Thai baht to 12.9949/13.0333 from 12.9729/9870 previously.