KUALA LUMPUR: The ringgit strengthened to the 4.07 level against the US dollar at Friday’s close, its strongest in nearly six years, following softer-than-expected US inflation data.
At 6 pm, the local currency rose to 4.0740/0785 versus the greenback, from 4.0840/0880 at Thursday’s close. The level was last seen on Jan 15, 2020, when the ringgit closed at 4.0740 against the US dollar.
Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, said the latest US consumer price index (CPI) reading overnight suggests the Federal Reserve (Fed) may be inclined to cut interest rates further in 2026.
"If that happens, the gap between the Fed Funds Rate and the overnight policy rate would be narrowed,” he told Bernama.
US inflation in November came in below expectations at 2.7 per cent, compared with consensus estimates of 3.1 per cent. Core inflation moderated to 2.6 per cent from 3.0 per cent in September.
Meanwhile, he said the Bank of Japan raised its policy rate today by 25 basis points to 0.75 per cent, the highest in three decades.
"However, the Japanese yen continues to weaken against the US dollar,” he added.
At the close, the ringgit traded mostly higher against a basket of major currencies.
It edged up against the euro to 4.7715/7767 from 4.7869/7915 at Thursday’s close, improved against the Japanese yen to 2.5909/5940 from 2.6188/6217, but fell against the British pound to 5.4514/4574 from 5.4513/4567.
The local currency also traded higher against ASEAN peers.
It appreciated against the Singapore dollar to 3.1515/1553 from 3.1620/1653, advanced versus the Thai baht to 12.9428/9620 from 12.9750/9935, gained against the Philippine peso to 6.94/6.95 from 6.97/6.98, and edged up against the Indonesian rupiah to 243.2/243.6 from 244.2/244.5. - Bernama
