THE ringgit depreciated to a fresh all-time low against the US dollar at the opening today following higher-than-expected US Consumer Price Index (CPI) data, a signal that a significant increase in the US interest rate could be on its way, a dealer said. 

At 9am, the local currency slid to 4.6920/6965 against the greenback from yesterday’s close of 4.6910/6940.

The US CPI rose to 8.2% in September.

ActivTrades trader Dyogenes Rodrigues Diniz said experts predict the interest rate to end the year at 4.5-4.75%.

“The interest rate is at 3.25% now and there are still two more Federal Reserve meetings in November and December, with a possible increase of 0.75% next month and another 0.74% in December,” he said in a note today. 

He said the US dollar/ringgit is currently holding a reading of 90.90 on the Relative Strength Index indicator, which shows an extreme overbought situation and a breakout below 4.6400 could make room for a more important drop in the coming days.

Meanwhile, the ringgit traded mostly lower against a basket of major currencies.

At yesterday’s close, the local note shrank against the British pound to 5.3052/3103 from 5.2291/2324, the euro to 4.5831/5875 from 4.5625/5654 and the Singapore dollar to 3.2963/2997 from 3.2726/2752 yesterday. 

It rose against the Japanese yen to 3.1843/1877 from 3.1957/1980. – Bernama, October 14, 2022.