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 9am, the local note rose to 4.5425/5480 against the greenback from 4.5800/5845 at yesterday’s close.
The US PPI came in lower than expected at 0.1% year-on-year (y-o-y) in June 2023 against consensus estimates of 0.4%, while core PPI was at 2.4% in June versus consensus estimates of 2.6%.
Bank Muamalat Malaysia Bhd chief economist and social finance head 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% y-o-y against the expectation of -9.5% and imports dropped to -6.8% compared with consensus estimates of -4.0%,” 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 yesterday’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 yesterday’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. – Bernama, July 14, 2023
