THE ringgit opened higher against the US dollar ahead of the release of the United States core personal consumption expenditure (PCE) inflation data later today, an analyst said.

At 9am, the local note strengthened to 4.4120/4170 versus the greenback from yesterday’s closing of 4.4185/4225.

Bank Muamalat Malaysia Bhd chief economist and social finance Mohd Afzanizam Abdul Rashid said the US Dollar Index declined by 0.48% to 102.144 overnight.

This was due to the market’s lack of direction as well as investors waiting for more drivers after two key economic indicators in the US came in very close to expectations, he said.

“It appears that macro numbers have been softening in the US, which would bolster the case for a dovish Federal Reserve going forward,” he said.

“Tonight, we will see the core PCE inflation rate, which is the favourite inflation gauge by the Fed, being announced.

“Consensus estimates showed core PCE could be sustained at 4.7% year-on-year in February. Should the inflation rate turn lower, it could lead to a weaker US dollar going forward.”

It was reported that the final reading for the US GDP for the fourth quarter of 2022 stood at a 2.6% annualised rate against market expectation of 2.7%.

Meanwhile, the US labour market weakened slightly with initial jobless claims rising to 198,000 last week from 191,000 in the week prior.

Back home, the ringgit was traded mostly lower against a basket of major currencies.

The local note slipped versus the British pound to 5.4704/4766 from 5.4533/4582 at yesterday’s close and declined vis-a-vis the euro to 4.8157/8212 from 4.7985/8028 yesterday, but it rose against the Japanese yen to 3.3113/3153 from 3.3282/3315 previously.

In contrast, the ringgit was traded mostly higher against Asean currencies.

It appreciated slightly against the Singapore dollar at 3.3228/3271 compared with 3.3244/3279 at yesterday’s close, improved vis-a-vis the Philippine peso to 8.11/8.12 from 8.12/8.13 previously and went up against the Indonesian rupiah to 293.20/293.60 from 293.60/294.00.

However, the local currency weakened against the Thai baht to 12.9229/9428 from 12.8970/9147 at Thursday’s close. – Bernama, March 31, 2023.