KUALA LUMPUR: The ringgit opened higher against the greenback for the third consecutive day as the US dollar slipped following a surprising decline in the United States Producer Price Index (PPI) in March, said an analyst.
At 9am, the local note rose to 4.3880/3915 versus the US dollar from yesterday’s closing rate of 4.3995/4025.
The US Dollar Index, which measures the greenback against six major peers, fell by 0.47% to 101.01 points as the PPI for March dropped to 2.7% from 4.6% in February.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the initial jobless claims in the US also rose to 239,000 last week, beating consensus estimates of 232,000 and surpassing the previous week’s level of 228,000.
“Such data points indicate that the case for a pause in the US Federal Reserve’s (Fed) rate hikes has gained more credence.
“Major currencies such as euro, sterling and yen also rose against the greenback and the ringgit could also gain some ground versus the US dollar today,” he said.
As such, Afzanizam anticipates the ringgit to hover around RM4.39 against the US dollar, with the current support and resistance levels at RM4.3466 and RM4.4236, respectively.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz opined that the greenback’s decline followed the US Consumer Price Index (CPI) data, which came in below expectations at 5.0% against the forecast of 5.2%.
“CPI measures inflation in the US, and a lower-than-expected reading shows that the Fed’s inflation control measures are having the desired effect, which is to cool down the economy.
“As such, the Fed may adopt a more lenient monetary policy in the coming months,” said Diniz, adding that the PPI data further confirmed that inflation is slowing in the US.
However, the ringgit traded mostly lower against a basket of major currencies, except against the British pound where it rose to 5.4951/4995 from 5.5047/5084 at yesterday’s close.
The local note eased to 4.8509/8548 from 4.8500/8533 vis-a-vis the euro and depreciated against the Japanese yen at 3.3095/3123 compared with 3.3034/3059 yesterday.
At the same time, the local note was traded higher against Asean currencies.
It improved against the Indonesian rupiah at 297.50/297.90 from 298.3/298.7 at the close yesterday and went up versus the Thai baht to 12.8695/8862 from 12.8942/9083 previously.
The ringgit had also increased against the Singapore dollar at 3.3112/3143 from 3.3194/3219 at yesterday’s close and inched up against the Philippines peso at 7.94/7.96 from 7.96/7.97 previously.
