KUALA LUMPUR (Feb 14): The ringgit continued to open lower against the US dollar on Wednesday, amid a higher-than-expected US inflation report, which suggested that the US Federal Reserve might keep interest rates steady at current levels.
At 9am, the ringgit had weakened to 4.7820/7880 against the greenback, compared with Tuesday’s close at 4.7600/7665.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the latest development boosted the US dollar index to 104.879 points, rising by 0.68%.
The US Bureau of Labour Statistics reported that inflation, as measured by the change in the consumer price index, softened to 3.1% in January 2024 from 3.4% in December 2023.
The reading came in above market expectations of 2.9%.
Therefore, he said, the Fed might keep rates steady until it is convinced that inflation will reach the 2% goal.
“Major currencies such as the euro and Japanese yen were also weaker against the greenback, and as such, the ringgit might stay weak against the US dollar today (Wednesday),” he told Bernama.
The ringgit was traded higher against a basket of major currencies.
The local note appreciated vis-a-vis the Japanese yen to 3.1734/1776 from 3.1827/1872 at Tuesday’s close, strengthened against the British pound to 6.0186/0262 from 6.0243/0325 previously, and rose versus the euro to 5.1191/1256 from 5.1256/1326.
Meanwhile, the ringgit was traded mostly lower versus other Asean currencies.
It was firmer versus the Thai baht at 13.2484/2701, compared with 13.3240/3478 at Tuesday’s close.
However, the local note fell against the Philippine peso to 8.51/8.53 from 8.50/8.52 on Tuesday, was marginally lower versus the Singapore dollar at 3.5391/5438 compared to 3.5377/5428 previously, and slipped against the Indonesian rupiah to 306.4/306.9 from 305.0/305.6.
