KUALA LUMPUR: The ringgit continued to strengthen against the US dollar at the opening today, following the decline in the United States’ (US) producer price index (PPI) in June, said an analyst.
At 9 am, the local note rose to 4.5425/5480 against the greenback from 4.5800/5845 at Thursday’s close.
The US PPI came in lower than expected at 0.1 per cent year-on-year (y-o-y) in June 2023 against consensus estimates of 0.4 per cent, while core PPI was at 2.4 per cent in June versus consensus estimates of 2.6 per cent.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the US dollar remained in a bearish mode with the US dollar index (DXY) hovering below 100 points.
“At the same time, China’s exports fell more than expected to -12.4 per cent y-o-y against the expectation of -9.5 per cent and imports dropped to -6.8 per cent compared with consensus estimates of -4.0 per cent,” he told Bernama.
Against such a backdrop, he expects the ringgit to extend its rally as the US Federal Reserve might soften its tone, given the emerging disinflationary trend along with rising concerns over global growth prospects.
“The immediate support level is currently at RM4.5491. Should the USD/MYR breach such level, the next support level is located at RM4.4872,” he noted.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
It rose against the Japanese yen to 3.2998/3040 from 3.3069/3103 at Thursday’s close and appreciated vis-a-vis the euro to 5.0976/1038 from 5.1168/1218 yesterday and gained against the British pound to 5.9593/5.9665 from 5.9861/9919 previously.
The local note was also traded higher against other Asean currencies.
The ringgit went up versus the Singapore dollar to 3.4374/4421 from Thursday’s close of 3.4553/4590 and firmed against the Indonesian rupiah to 303.4/304.0 from 305.9/306.4 previously.
It had also appreciated against the Thai baht to 13.1362/1578 from 13.2481/2673 yesterday and climbed against the Philippines’ peso to 8.34/8.36 from 8.40/8.41 previously.
US dollar plunges below 100 mark
The US dollar suffered substantial losses on Thursday and fell below the 100 mark for the first time since April 2022, as the US Producer Price Index (PPI) for June showed the US inflation cooling, reported Xinhua.
The dollar index, which measures the greenback against six major peers, decreased 0.75 per cent to 99.7696 in late trading, recording its new low following Wednesday. The greenback was headed for its biggest weekly slide in 2023.
The PPI for final demand, a measure of wholesale prices, rose 0.1 percent in June, on the heels of a 0.4 per cent decline in May, the Bureau of Labour Statistics reported Thursday, which was less than the 0.2 percent increase that economists had expected.
The PPI data followed Wednesday’s consumer price index (CPI) report, which showed US core inflation slowed significantly.
“With inflation slowing down faster than expected, the Fed’s tightening is producing the desired effect, and investors have started to price at the end of the current hiking cycle,” said ActivTrades analyst Ricardo Evangelista.
Analysts also pointed out that, while showing signs of softness, the labour market was still robust and the economy remained in good health.
Initial jobless claims for the week ending July 8 fell by 12,000 to 237,000 from 249,000 prior (revised from 248,000), the US Department of Labour said Thursday. However, the decline could be tied in part to the July 4 holiday, since unemployed workers sometimes delay applying for benefits around a holiday.
In late New York trading, the euro rose to US$1.1220 from US$1.1137 in the previous session, at its highest since April 2022.
Data showed on Thursday that Britain’s economy shrank by less than expected in May, so the Bank of England might be able to raise interest rates further without derailing growth.
The British pound rose modestly against the dollar on the back of the data, up to US$1.3129 from US$1.2991 in the previous session in late trading.
The US dollar bought 138.0260 Japanese yen, lower than 138.3180 Japanese yen of the previous session. The US dollar plunged to a fresh eight-year low of 0.8587 Swiss francs from 0.8670 Swiss francs, and it was down to 1.3108 Canadian dollars from 1.3192 Canadian dollars. The US dollar fell to 10.2078 Swedish Krona from 10.3800 Swedish Krona.
Short-term rates to remain stable
Short-term rates are expected to remain stable today on Bank Negara Malaysia’s (BNM) operations to absorb surplus liquidity from the financial system.
Liquidity is estimated at RM48.02 billion in the conventional system and RM27.18 billion in Islamic funds.
Today, the central bank will conduct a RM500 million conventional money market tender for seven days and a Qard tender of RM500 million for seven days.
It will also call for two reverse repo tenders, namely a RM1.5 billion tender for 31 days and a RM500 million tender for 94 days.
It also announced the availability of reverse repo, sale and buy-back agreements as well as collateralised commodity Murabahah facilities for tenors of one to three months.
At 4 pm, BNM will conduct up to RM48.7 billion conventional overnight tender and RM26.7 billion Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.5425/5480
100 yen 3.2998/3040
1 pound 5.9593/5.9665
1 euro 5.0976/1038
1 SGD 3.4374/4421
100 baht 13.1362/1578
1 mln rupiah 303.4/304.0
100 pesos 8.34/8.36
Today’s exchange rates issued by Malayan Banking Bhd
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.6670 | 4.5330 | 4.5230 |
| 1 Australian Dollar | 3.1980 | 3.0720 | 3.0560 |
| 1 Brunei Dollar | 3.5200 | 3.4190 | 3.4110 |
| 1 Canadian Dollar | 3.5480 | 3.4540 | 3.4420 |
| 1 Euro | 5.2250 | 5.0570 | 5.0370 |
| 1 New Zealand Dollar | 2.9660 | 2.8580 | 2.8420 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.5200 | 3.4190 | 3.4110 |
| 1 Sterling Pound | 6.0880 | 5.8990 | 5.8790 |
| 1 Swiss Franc | 5.3840 | 5.2620 | 5.2470 |
| 100 UAE Dirham | 129.0000 | 122.3300 | 122.1300 |
| 100 Bangladesh Taka | 4.3790 | 4.1080 | 3.9080 |
| 100 Chinese Renminbi | 65.5000 | 63.0000 | N/A |
| 100 Danish Krone | 71.8600 | 66.1400 | 65.9400 |
| 100 Hongkong Dollar | 60.4800 | 57.4800 | 57.2800 |
| 100 Indian Rupee | 5.8100 | 5.4500 | 5.2500 |
| 100 Indonesian Rupiah | 0.0323 | 0.0292 | 0.0242 |
| 100 Japanese Yen | 3.3700 | 3.2650 | 3.2550 |
| 100 New Taiwan Dollar | 16.1000 | N/A | N/A |
| 100 Norwegian Krone | 47.5400 | 43.7200 | 43.5200 |
| 100 Pakistan Rupee | 1.7500 | 1.6200 | 1.4200 |
| 100 Philippine Peso | 8.6800 | 8.1800 | 7.9800 |
| 100 Qatar Riyal | 129.9300 | 123.3400 | 123.1400 |
| 100 Saudi Riyal | 126.2300 | 119.8300 | 119.6300 |
| 100 South Africa Rand | 26.7300 | 24.1300 | 23.9300 |
| 100 Sri Lanka Rupee | 1.5400 | 1.3900 | 1.1900 |
| 100 Swedish Krona | 46.6000 | 42.4500 | 42.2500 |
| 100 Thai Baht | 14.1000 | 12.5200 | 12.1200 |
Gold down
The physical price of gold as at 9.30 am stood at RM277.10 per gramme, down RM2.54 from RM279.64 at 5 pm yesterday. – BERNAMA
