Ringgit opens higher in early session vs greenback as US inflation moderates

KUALA LUMPUR - The ringgit snapped its three-day losing streak to open higher against the US dollar in the early session today as the greenback softened following a lower-than-expected United States (US) Ápril consumer price index (CPI) data released last night.

At 9 am, the local note rose to 4.4470/4505 versus the US dollar from Wednesday’s closing rate of 4.4565/4605.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the US inflation rate moderated to 4.9 per cent year-on-year in April, lower compared to consensus estimates of five per cent.

Meanwhile, the core inflation rate stood at 5.5 per cent matching the consensus forecast.

"Generally speaking, the US inflation rate has been progressively lower after reaching 9.1 per cent in June last year, suggesting the restrictive monetary policy stance by the US Federal Reserve (Fed) has led to lower inflation although still above the two per cent target.

"As such, the chance of a pause in the Fed Fund Rate is rising, leading to a weaker dollar. Hence, the ringgit might appreciate against the greenback today," he told Bernama.

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

It depreciated against the euro to 4.8877/8915 from 4.8830/8874 at Wednesday’s close and went down against the Japanese yen to 3.3162/3190 from 3.2962/2994 yesterday but was higher vis-a-vis the British pound at 5.6188/6232 versus 5.6254/6305 previously.

At the same time, the local note traded mixed against Asean currencies.

It improved vis-a-vis the Thai baht to 13.2331/2495 from 13.2354/2528 and gained versus the Indonesian rupiah to 301.8/302.2 from 302.4/302.8 yesterday.

However, the local note slipped to 3.3588/3619 against the Singapore dollar compared with 3.3563/3596 on Wednesday and was flat against the Philippines’ pesos to 8.00/8.01 from 8.00/8.01 previously. - BERNAMA