KUALA LUMPUR: The ringgit strengthened against the US dollar at the close on Tuesday, in line with other regional currencies as market participants awaited the release of the US consumer price index (CPI) report tomorrow.
At 6 pm, the local note bounced to 4.3400/3445 versus the greenback from yesterday’s close of 4.3700/3745.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the recent downward revision of past US non-farm payroll data suggests that the US labour market is softening while crude oil prices have been on a lower trajectory. "In that sense, the disinflationary trend should remain intact, paving the way for the eventual (US) rate cut next week,” he told Bernama.
In addition, he said the key question now of whether the US Federal Reserve (Fed) would opt for a 50 basis points or 25 basis points cut would depend on how severe the demand slowdown is. "For now, the ringgit should be in a healthy trend given the possibility of a US rate cut which could narrow the gap between the Fed funds rate and the overnight policy rate,” he added.
At the close, the ringgit traded higher against a basket of major currencies.
It rose versus the euro to 4.7909/7959 from 4.8310/8360 at Monday’s close, perked up against the British pound to 5.6850/6909 from 5.7195/7253 previously, and improved vis-a-vis the Japanese yen to 3.0309/0343 from 3.0449/0482.
The ringgit also traded higher against ASEAN currencies.
It strengthened versus the Thai baht to 12.8581/8764 from 12.8666/8851 yesterday, advanced against the Indonesian rupiah to 280.7/281.2 from 282.6/283.1, edged up vis-a-vis the Singapore dollar to 3.3257/3294 from 3.3453/3490 and gained against the Philippine peso to 7.69/7.71 from 7.74/7.75 previously. - Bernama
