Ringgit continues to rise against the US Dollar

KUALA LUMPUR: The ringgit continued to strengthen against the US dollar this morning following expectations of a decline in interest rates in the US amid improving local data, according to analysts.

According to Bernama, at 8 AM, the ringgit rose to 4.4380/4500 against the US dollar from 4.4440/4505 at yesterday’s close.

The Chief Economist of Bank Muamalat Malaysia Bhd, Dr. Mohd Afzanizam Abdul Rashid, stated that the ringgit’s performance is optimistic in light of the anticipated announcement of better Gross Domestic Product (GDP) data for the second quarter of 2024, which will be released this Friday.

Regarding the US Producer Price Index (PPI), Mohd Afzanizam mentioned that it was lower than expected at 2.2 percent in July, compared to the consensus estimate of 2.3 percent and 2.7 percent the previous month.

Meanwhile, the core PPI also decreased to 2.4 percent from 3.0 percent previously.

“This situation indicates that a disinflation trend is occurring, and soon, inflation will reach the Federal Reserve’s target rate of 2.0 percent,” he told Bernama.

In this context, the US Dollar Index (DXY) fell 0.50 percent to 102.624 points, while US Treasury yields for the two-year and ten-year periods dropped by nine and six basis points, respectively, to 3.93 percent and 3.84 percent, he said.

Mohd Afzanizam stated that, consequently, the ringgit against the US dollar could move toward the support level of RM4.40.

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

It declined against the euro to 4.8796/8928 from 4.8520/8591 at yesterday’s close, lower against the Japanese yen to 3.0193/0278 from 3.0053/0099, and decreased against the British pound to 5.7095/7249 from 5.6839/6922 previously.

The ringgit traded mixed against ASEAN currencies.

The local currency strengthened against the Indonesian rupiah to 280.3/281.1 from 280.6/281.1 and remained firm against the Philippine peso at 7.79/7.81 from 7.80/7.81 previously.

However, it declined against the Singapore dollar to 3.3693/3786 from 3.3590/3642 and decreased against the Thai baht to 12.6655/7081 from 12.6351/6578 previously.