KUALA LUMPUR: The ringgit extended its gains against the US dollar for the third straight day, as the greenback’s safe-haven status weakened following lower-than-expected US Consumer Price Index (CPI) data for July, which fuelled expectations of a September interest rate cut.
At 6 pm, the local note appreciated to 4.2040/2085 versus the US dollar, up 0.57 per cent from Tuesday’s close of 4.2290/2320.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the softer-than-expected US inflation rate of 2.7 per cent in July was largely driven by a moderation in the owner’s equivalent rent (OER) to 4.1 per cent, after holding at 4.2 per cent for two straight months.
OER accounts for about 25 per cent of the Consumer Price Index (CPI) weightage, he said.
“It appears that a weak labour market and stable inflation rate would tilt the balance for the upcoming Federal Open Market Committee meeting in September, as during July’s meeting, there were two members in favour of a 25-basis point cut,” he told Bernama.
At the close, the ringgit ended lower against major currencies.
It fell versus the Japanese yen to 2.8554/8586 from Tuesday’s close of 2.8490/8512, declined against the euro to 4.9305/9357 from 4.9090/9125 yesterday, and decreased vis-a-vis the British pound to 5.7078/7139 from 5.6905/6946.
The ringgit traded mixed against regional peers.
It strengthened versus the Singapore dollar to 3.2864/2902 from 3.2867/2893 at yesterday’s close and appreciated against the Indonesian rupiah to 259.4/259.8 from 259.6/259.9.
However, the local note eased versus the Thai baht to 13.0276/0476 from 13.0135/0300 previously and was unchanged against the Philippine peso at 7.41/7.42. – Bernama
