KUALA LUMPUR – The ringgit weakened against the US dollar at the opening today, as the higher-than-expected United States Producer Price Index (PPI) data released yesterday caused the greenback to appreciate against its counterparts, a dealer said.
At 9 am, the local note slipped to 4.2330/2380 against the greenback from 4.2300/2340 at yesterday’s close.
ActivTrades trader Dyogenes Rodrigues Diniz said the PPI data, which showed an 0.8% jump against the forecast of 0.5%, measures inflation through the variation in the price of raw material used by producers.
“This PPI reading reaffirms the inflation situation in the US, which could fuel its monetary policy in 2022,” he told Bernama.
Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit should stay weak during the day as the Federal Open Market Committee’s decision will be unveiled on Wednesday night.
“Despite news over Pfizer’s (antiviral Covid-19) pill Paxlovid, which is said to have a better efficacy rate, the markets are giving more weight on the major central bank decision this week and choose to prefer the US dollar as the Federal Reserve is expected to remain hawkish in their economic assessment,” he said.
Hence, he expects the ringgit to trade in a narrow range today.
At the opening bell, the ringgit was traded mostly higher against other major currencies.
The local note rose against the Singapore dollar to 3.0907/0946 from 3.0912/0946 at Tuesday’s close, appreciated versus the euro to 4.7685/7741 from 4.7803/7848 and climbed vis-a-vis the Japanese yen to 3.7213/7260 from 3.7239/7278.
However, the ringgit eased against the British pound to 5.6015/6081 from 5.5929/5982 previously.
Meanwhile, Bursa Malaysia opened higher in early trade today, on bargain-hunting after experiencing a heavy sell-off yesterday, despite a weaker performance on Wall Street.
The US shares turned risk averse heading into major central bank meetings and lingering worries over the spread of the Omicron variant, dealers said
At 9.52am, the benchmark FTSE Bursa Malaysia KLCI rose 2.63 points to 1,483.55 compared with 1,480.92 at Tuesday’s close.
The index opened 0.93 of-a-point better at 1,481.85.
On the broader market, losers led gainers 242 to 239, while 313 counters were unchanged, 1,523 untraded and 19 others suspended.
Turnover stood at 452.51 million units valued at RM244.20 million. – Bernama, December 15, 2021
