Ringgit recovers to close stronger versus the US currency
KUALA LUMPUR: According to an analyst, the ringgit recovered to close the day higher against the US dollar as the US dollar declined ahead of this week’s US inflation report, which would provide clues about the prospects for interest rates globally.
The ringgit strengthened against the US dollar from Friday’s close of 4.7100/7130 to 4.6940/6990 at 6 p.m.
Chief economist of Bank Muamalat Malaysia Bhd, Mohd Afzanizam Abdul Rashid, stated that the local currency was performing well today in line with the performance of the regional currencies relative to the US dollar.
He pointed out that the US Consumer Sentiment Index (CSI) dropped to 69.1 points in May 2024 from 77.2 points in April 2024, according to last week’s report. The Consumer Expectations and Current Economic Condition indexes also decreased, coming in at 68.8 (April: 76.0) and 69.6 (April: 79.0), respectively.
This implies that American consumers are growing more dubious about the health of the economy.
He told Bernama, “While this can help build the case for a rate cut, market participants would be cautious on the interest rate outlook due to the Federal Reserve members’ ongoing concern about inflation.”
In the meantime, the ringgit saw most of its trading versus a major currency basket decline at the close.
In relation to the Japanese yen, the local currency increased to 2.9919/9953 from Friday’s 2.9996/3.0017; however, it decreased to 5.1005/1059 from 5.1000/1032 against the euro and decreased to 5.9881/9945 from 5.9859/9898 against the British pound.
The local currency did, however, trade higher than its Asean counterparts.
At Friday’s end, the local note gained ground against the Singapore dollar, moving up to 3.4799/4838 from 3.4876/4901, and gained ground against the Thai baht, moving up to 12.8132/8321 from 12.8373/8507.
The ringgit increased slightly against the Philippine peso to 8.08/8.09 from 8.09/8.10 and against the Indonesian rupiah to 292.0/292.5 from 294.5/294.7 last week. – Bernama