Ringgit ends near 10-month high as US$ slides

KUALA LUMPUR: The ringgit steadied near its strongest level in nearly 10 months against the US dollar after softer US inflation data drove up bets that the Federal Reserve will be less aggressive with its rate hikes soon.

At 6 pm, the ringgit strengthened to 4.3325/3375 against the greenback from Thursday’s close of 4.3570/3615.

SPI Asset Management managing partner Stephen Innes told Bernama that the broader inflows are driving sentiment today after the US Consumer Price Index (CPI) hurdle was cleared.

He said the CPI headline index declined 0.1 per cent, chopping the yearly pace to 6.5 per cent, and barring some unexpected turns, the Federal Reserve will surely downshift to 25 basis points rate increments early next month.

Alongside the softening headline CPI print, investors are also digesting better than expected weekly jobless claims, which extends the recent trend of data points indicating continued strength in the US labour market, Innes said.

The weekly initial jobless claims decline to 205,000 in the first week of 2023 from the previous week's print of 206,000. It was also far better than the expected of 215,000.

As confidence builds on the direction of the ringgit, the 4.30 level is likely in the not-too-distant future.

Meanwhile, the ringgit traded mostly lower against a basket of major currencies, except against the British pound, where it gained to 5.2973/3035 from 5.3033/3088 at Thursday’s close.

The local unit was lower against the Singapore dollar to 3.2782/2825 from 3.2764/2803, declined versus the euro to 4.6986/7040 from 4.6890/6938, and fell vis-a-vis the Japanese yen to 3.3703/3744 from 3.3242/3281 at yesterday’s close. - Bernama