Ringgit Weakens Against US Dollar Amid Stronger US Economic Data

The ringgit opened lower against the US dollar on Friday due to stronger-than-expected US economic data. At 8 am, the local currency eased to 4.0680/0745 against the greenback from 4.0630/0670 yesterday's close.

Bank Muamalat Malaysia Bhd chief economist Dr 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 per cent in July, versus consensus estimates of 5.3 per cent.

This has led to a potential US interest rate hike thesis gaining momentum, causing the US Dollar Index (DXY) to increase 0.26 per cent to 99.077 points. Dr Afzanizam said businesses are inclined to pass on their rising cost to consumers, which means that the consumer price index (CPI) could stay elevated.