Ringgit closes stronger against major currencies

KUALA LUMPUR: The ringgit closed stronger against other major currencies but fell against the US dollar today as traders remained cautious about the direction of US interest rates, following higher-than-expected US Consumer Price Index (CPI) data released yesterday, according to an economist.

According to Bernama, core CPI increased by 0.3 percent month-on-month in August, exceeding the consensus estimate of 0.2 percent. This rate continued to rise from 0.1 percent in June and 0.2 percent in July.

At 6 p.m., the ringgit weakened to 4.3330/3370 against the US dollar, compared to yesterday’s close of 4.3270/3325.

Bank Muamalat Malaysia Bhd’s Chief Economist, Dr. Mohd Afzanizam Abdul Rashid, said the ringgit was relatively stable throughout the day against the US dollar, trading around 4.33.

“We believe that traders and investors remain cautious about the direction of US interest rates, especially after the higher-than-expected core CPI data. This, to some extent, reduces the likelihood of an aggressive rate cut by the US Federal Open Market Committee (FOMC),” he told Bernama.

He also noted that the upcoming FOMC meeting next week will be crucial in determining how far the Federal Reserve is willing to ease its tight monetary policy stance.

“Therefore, their forecasts on the Federal Funds Rate and other macroeconomic variables such as inflation and unemployment rates will be closely monitored next week,” he added.

At the close, the ringgit traded higher against a basket of major currencies.

The ringgit appreciated against the euro to 4.7724/7768 from 4.7774/7835 at Wednesday’s close, rose against the British pound to 5.6550/6602 from 5.6623/6695 previously, and strengthened against the Japanese yen to 3.0364/0395 from 3.0558/0599.

The ringgit also traded higher against ASEAN currencies. It gained against the Thai baht to 12.8351/8527 from 12.8523/8752 yesterday, improved against the Singapore dollar to 3.3190/3224 from 3.3223/3268, rose against the Indonesian rupiah to 280.6/281.0 from 280.8/281.4, and strengthened against the Philippine peso to 7.71/7.73 from 7.73/7.75 previously.