Ringgit Strengthens Against Majors Amid US Inflation Moderation

The Malaysian ringgit began Thursday by strengthening against major currencies but easing against the US dollar. According to Bank Muamalat Malaysia Bhd's chief economist Dr Mohd Afzanizam Abdul Rashid, this is due in part to a moderation in the highly anticipated US consumer price index (CPI), which has eased slightly to 3.4 per cent in July from 3.5 per cent a month ago.

The ringgit opened at 8 am with an exchange rate of 4.0850/0950 against the greenback, down from yesterday's close of 4.0835/0875.

Dr Afzanizam Abdul Rashid noted that the 10-year US Treasury yields fell below 4.70 per cent, suggesting a moderation in inflation premium, while the two-year note yielded one basis point lower to 4.20 per cent, implying the Federal Reserve may not be in a hurry to raise interest rates.

Despite this, he expects the ringgit to oscillate around RM4.07 to RM4.09 against the US dollar today.