THE ringgit opened higher against the US dollar for the third consecutive day as the greenback slipped following a surprising decline in the US producer price index (PPI) in March, an analyst said.

At 9am, the local note rose to 4.3880/3915 versus the US dollar from yesterday’s closing of 4.3995/4025.

The US dollar index, which measures the greenback against six major peers, fell by 0.47% to 101.01 points as the PPI for March dropped to 2.7% from 4.6% in February.

Bank Muamalat Malaysia Bhd chief economist and social finance Mohd Afzanizam Abdul Rashid said the initial jobless claims in the US also rose to 239,000 last week, beating consensus estimates (232,000) and surpassing the previous week’s level (228,000).

“Such data indicate that the case for a pause in the US Federal Reserve’s (Fed) rate hikes has gained more credence,” he said.

“Major currencies such as euro, sterling and yen also rose against the greenback, and the ringgit could also gain some ground versus the US dollar today.”

Afzanizam expects the ringgit to hover around 4.39 against the US dollar, with the current support and resistance levels at 4.3466 and 4.4236 respectively.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz opined that the greenback’s decline followed the US consumer price index (CPI) data, which came in below expectations at 5% against the forecast of 5.2%.

“CPI measures inflation in the US, and a lower-than-expected reading shows that the Fed’s inflation control measures are having the desired effect, which is to cool down the economy.

“As such, the Fed may adopt a more lenient monetary policy in the coming months,” said Diniz, adding that the PPI data further confirmed that inflation is slowing in the US.

However, the ringgit traded mostly lower against a basket of major currencies, except against the British pound where it rose to 5.4951/4995 from 5.5047/5084 at yesterday’s close.

The local note eased to 4.8509/8548 from 4.8500/8533 vis-a-vis the euro and depreciated against the Japanese yen at 3.3095/3123 from 3.3034/3059 yesterday.

At the same time, the local note was traded higher against Asean currencies.

It improved against the Indonesian rupiah at 297.50/297.90 from 298.3/298.7 at yesterday’s close and went up versus the Thai baht to 12.8695/8862 from 12.8942/9083 previously.

The ringgit also rose against the Singapore dollar at 3.3112/3143 from 3.3194/3219 at yesterday’s close and inched up against the Philippines’ peso at 7.94/7.96 from 7.96/7.97 previously. – Bernama, April 14, 2023.