KUALA LUMPUR: The ringgit closed higher against other major currencies but lower versus the US dollar today as traders stayed cautious on the direction of the United States (US) rate cuts, following the higher-than-expected US consumer price index (CPI) data last night, said an economist.
The core CPI rose 0.3 per cent month-on-month in August, exceeding the consensus estimate of 0.2 per cent. It has been climbing steadily from 0.1 per cent in June and 0.2 per cent in July.
At 6 pm, the local note eased to 4.3330/3370 versus the greenback from yesterday’s close of 4.3270/3325.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was fairly stable during the day against the US dollar, hovering around 4.33.
"We opined that traders and investors remained guarded on the direction of the US interest rates, especially after the US core CPI came in higher than expected last night.
"This, to some degree, remove some of the odds for aggressive rate cuts by the US Federal Open Market Committee (FOMC),” he told Bernama.
He also noted that the upcoming FOMC meeting next week has become critically important in determining how far the Federal Reserve is willing to ease its restrictive monetary policy stance.
"Hence, their quarter forecast on the Federal Funds Rate and other macroeconomic variables such as inflation and unemployment rate will be closely monitored next week,” he added.
At the close, the ringgit was traded higher against a basket of major currencies.
It inched up versus the euro to 4.7724/7768 from 4.7774/7835 at Wednesday’s close, gained against the British pound to 5.6550/6602 from 5.6623/6695 previously, and strengthened vis-a-vis the Japanese yen to 3.0364/0395 from 3.0558/0599.
The ringgit also traded higher against ASEAN currencies.
It advanced versus the Thai baht to 12.8351/8527 from 12.8523/8752 yesterday, improved vis-a-vis the Singapore dollar to 3.3190/3224 from 3.3223/3268, edged up against the Indonesian rupiah to 280.6/281.0 from 280.8/281.4, and increased against the Philippine peso to 7.71/7.73 from 7.73/7.75 previously. - Bernama
