KUALA LUMPUR: The ringgit opened higher against the greenback as the latest US inflation data strengthened hopes that the US Federal Reserve (Fed) would hold interest rates.
At 9.05 am, the local note rose to 4.6750/6800 against the greenback from Wednesday’s close of 4.6785/6835.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the US “core inflation rate matched the consensus forecast of 4.3 per cent and was lower than the previous month’s 4.7 per cent.”
“This indicates that the underlying inflationary pressures have gradually eased, setting the stage for a likely unchanged stance (in US interest rates).
“However, the US headline inflation for August was higher than expected at 3.7 per cent year-on-year, up from the previous month’s 3.2 per cent, surpassing the consensus estimate of 3.6 per cent,” he told Bernama.
Consequently, he said the market can anticipate some positive movement in the ringgit today, given that the exchange rate has already reached an oversold position from a technical perspective.
The ringgit was traded mixed against a basket of major currencies.
It depreciated against the Japanese yen to 3.1781/1817 from 3.1742/1778 on Wednesday’s close and fell against the British pound to 5.8433/8495 from 5.8308/8370 and was unchanged against the euro at 5.0200/0254.
The local note also traded mixed against other Asean currencies.
It ticked down vis-à-vis the Singapore dollar to 3.4385/4427 from 3.4358/4400 at Wednesday’s close and was lower versus the Thai baht to 13.1011/1203 from 13.0809/1003.
It appreciated against the Indonesian rupiah to 304.1/304.6 from 304.3/304.8 from the previous day’s close and was unchanged against the Philippine peso at 8.24/8.26.
US dollar edged up after CPI data
The US dollar edged up in late trading on Wednesday, after a slightly hotter-than-anticipated consumer price index (CPI) report for August.
The dollar index, which measures the greenback against six major peers, rose 0.06 per cent to 104.7727 in late trading, reported Xinhua.
The US Bureau of Labor Statistics released its latest CPI report on Wednesday. The US headline inflation expanded at a 0.6 per cent pace in August from a month ago as market anticipation. Core CPI that excludes volatile oil and food prices rose by 0.3 per cent, higher than estimates and July’s 0.2 per cent.
The report showed headline inflation grew 3.7 per cent in August from a year ago, a pickup from a 3.2 per cent increase in July. Rising energy prices fueled the uptick, while underlying price pressures stayed mostly mild.
US stocks advanced and US Treasury yields oscillated within a tight range on Wednesday after the CPI data.
“This was a complicated inflation report, considering price gains are failing to ease by enough for the central bank to abandon its hawkish stance,” said Ed Moya, a senior market analyst at OANDA Corp.
“Today’s uptick in CPI could slightly increase the likelihood of a November interest rate hike and potentially delay the timing of any rate cuts until deeper into 2024,” said Joe Tuckey, head of FX analysis at Argentex Group.
US Treasury yields were range-bound in the wake of the CPI report.
In late New York trading, the euro was unchanged at US$1.0732, and the British pound rose to US$1.2486 from US$1.2485.
The US dollar bought 147.4540 Japanese yen, higher than 147.1020 Japanese yen of the previous session. The US dollar increased to 0.8934 Swiss francs from 0.8912 Swiss francs, and it was up to 1.3564 Canadian dollars from 1.3556 Canadian dollars. The US dollar increased to 11.1379 Swedish krona from 11.1007 Swedish krona.
Short-term rates 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 RM32.22 billion in the conventional system and RM17.86 billion in Islamic funds.
Today, the central bank will conduct two conventional money market tenders, namely a RM1 billion tender for seven days and a RM500 million tender for 15 days, as well as two reverse repo tenders of RM1.5 billion tender for 32 days and RM500 million tender for 91 days.
The central bank will conduct a Qard tender of RM500 million for seven days.
BNM will also be issuing a RM2 billion Bank Negara Interbank Bills Islamic (BNIBI) tender for 30 days on Sept 18.
The central bank 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, it will conduct up to RM32.7 billion conventional overnight tender and RM17.4 billion for Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
1 USD 4.6750/6800
100 yen 3.1781/1817
1 pound 5.8433/8495
1 euro 5.0200/0254
1 SGD 3.4385/4427
100 baht 13.1011/1203
1 mln rupiah 304.1/304.6
100 pesos 8.25/8.26
Exchange rates issued by Malayan Banking Bhd today
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.7475 | 4.6145 | 4.6045 |
| 1 Australian Dollar | 3.0750 | 2.9540 | 2.9380 |
| 1 Brunei Dollar | 3.4910 | 3.3910 | 3.3830 |
| 1 Canadian Dollar | 3.5040 | 3.4120 | 3.4000 |
| 1 Euro | 5.1070 | 4.9440 | 4.9240 |
| 1 New Zealand Dollar | 2.8280 | 2.7250 | 2.7090 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4910 | 3.3910 | 3.3830 |
| 1 Sterling Pound | 5.9410 | 5.7580 | 5.7380 |
| 1 Swiss Franc | 5.3050 | 5.1830 | 5.1680 |
| 100 UAE Dirham | 130.8600 | 124.1200 | 123.9200 |
| 100 Bangladesh Taka | 4.4100 | 4.1240 | 3.9240 |
| 100 Chinese Renminbi | 65.7800 | 63.0200 | N/A |
| 100 Danish Krone | 70.1700 | 64.6000 | 64.4000 |
| 100 Hongkong Dollar | 61.3400 | 58.3200 | 58.1200 |
| 100 Indian Rupee | 5.8300 | 5.4700 | 5.2700 |
| 100 Indonesian Rupiah | 0.0320 | 0.0290 | 0.0240 |
| 100 Japanese Yen | 3.2320 | 3.1310 | 3.1210 |
| 100 New Taiwan Dollar | N/A | N/A | N/A |
| 100 Norwegian Krone | 45.5800 | 41.9300 | 41.7300 |
| 100 Pakistan Rupee | 1.6100 | 1.5100 | 1.3100 |
| 100 Philippine Peso | 8.5000 | 8.0100 | 7.8100 |
| 100 Qatar Riyal | 131.7500 | 125.0700 | 124.8700 |
| 100 Saudi Riyal | 128.0900 | 121.6000 | 121.4000 |
| 100 South Africa Rand | 26.2000 | 23.6600 | 23.4600 |
| 100 Sri Lanka Rupee | 1.5100 | 1.3900 | 1.1900 |
| 100 Swedish Krona | 44.0600 | 40.1400 | 39.9400 |
| 100 Thai Baht | 13.9000 | 12.3300 | 11.9300 |
Gold up
The physical price of gold as at 9.30 am stood at RM278.27 per gramme, up four sen from RM278.23 at 5 pm yesterday. – BERNAMA
