Ringgit slides after US PPI rises more than expected

KUALA LUMPUR: The ringgit opened lower against the US dollar this morning amidst the higher-than-expected United States (US) Producer Price Index (PPI) data for September, which came in at 8.5 per cent versus 8.4 per cent forecast, said a dealer.

At 9 am, the local currency slid to 4.6850/6875 against the greenback from Wednesday’s close of 4.6820/6855.

ActivTrades trader Dyogenes Rodrigues Diniz said the new data signals that inflation remains high in the US as the PPI measures the change in the price of goods, products and services used by companies to produce their products.

"An even more important driver was the US Federal Open Market Committee (FOMC) meeting minutes, released yesterday, which provided some clues on the next monetary policy steps to be adopted by US Federal Reserve,” he said in a note today.

He added that several FOMC members remain determined to maintain price stability by raising interest rates, but noted that it is also necessary to balance the increase so that it does not have undesirable effects on the economy.

Overall, he said the interest rates in the US will likely continue to increase until year-end, but may do so at a slower pace.

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

The local note slipped against the British pound to 5.2050/2078 from 5.1825/1864 at Wednesday's close, fell vis-a-vis the euro to 4.5505/5530 from 4.5453/5487 and slid versus the Singapore dollar to 3.2666/2688 from 3.2595/2622 yesterday.

However, the ringgit strengthened against the Japanese yen to 3.1914/1936 from 3.1987/2014 previously. - Bernama