Ringgit Opens Slightly Higher Against US Dollar Ahead of Key Inflation Data

KUALA LUMPUR: The Malaysian ringgit opened marginally higher against the U.S. dollar on Wednesday, trading at 4.4330/4465 compared to Tuesday’s close of 4.4365/4400. This slight gain came despite the U.S. Dollar Index (DXY) strengthening, typically a signal of higher demand for the dollar.

Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, noted that demand for the greenback is expected to rise as U.S. Federal Reserve officials indicated that future interest rate cuts would be data-dependent. “Minneapolis Fed President Neel Kashkari suggested that he will assess the upcoming inflation data before making any rate decision,” said Dr. Afzanizam. This approach may keep the ringgit and other emerging market currencies under pressure in the near term.

Investors are closely watching the latest U.S. Consumer Price Index (CPI) report, due to be released tonight. Expectations are for a 2.6% increase in October, up from 2.4% in the previous month, with Core CPI forecasted to hold steady at 3.3%.

The ringgit also traded higher against a range of major and regional currencies this morning. It strengthened against the British pound at 5.6463/6635 from 5.6889/6934 and gained against the euro, trading at 4.7061/7204 from 4.7111/7148. It rose against the Japanese yen to 2.8661/8752 from 2.8788/8812 at Tuesday’s close.

Among ASEAN currencies, the ringgit made gains, trading higher against the Thai baht at 12.7162/7637 from 12.7456/7608 and strengthening against the Singapore dollar at 3.3107/3210 from 3.3143/3174. The local currency also rose slightly against the Philippine peso at 7.53/7.56 from 7.54/7.55 and gained on the Indonesian rupiah at 280.8/281.9 from 281.0/281.5.