Ringgit Takes Hit as Strong US Data Supports Greenback

The ringgit opened lower against the US dollar on September 11, weighed down by strong US economic data. The local currency eased to 4.0680/0745 against the greenback from Thursday's close of 4.0630/0670.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US producer price index (PPI) rose more than expected to 5.4 per cent year-on-year in August, up from 4.8% in July and above the consensus estimate of 5.3 per cent.

This has led to increased speculation about a potential US interest rate hike next week, with Mohd Afzanizam noting that businesses are passing on their rising costs to consumers, which could keep the consumer price index (CPI) elevated.

Quintex Intel global strategist Stephen Innes also weighed in, saying that the stronger-than-expected PPI reading had pushed the probability of a US Federal Reserve rate hike next week to around 75 per cent.