THE ringgit ended marginally higher against the US dollar today, taking the cue from the Chinese yuan, which rose sharply on more support from the People’s Bank of China.

The greenback also remained firm ahead of the US inflation data due later today, an analyst said.

At 6pm, the local note rose to 4.5690/5720 against the US dollar from 4.5705/5755 at yesterday’s close.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the ringgit moved in a tight range today versus the greenback.

He said China’s economy continues to be in the limelight with the recent contraction in trade data and negative Consumer Price Index (CPI) print indicating that the country needs economic stimulus to grow at a sustainable pace in the second half of the year.

“Tonight, the focus will be on the US CPI, which is expected to increase slightly to 3.3% in July from 3% in the previous month, while the core CPI is likely to maintain at 4.8%,” he said.

“In some sense, there appears to be concern over the global growth prospects, which necessitate an accommodative monetary policy. Whatever the case may be, risk-off mode could lead to higher demand for the US dollar.”

SPI Asset Management managing partner Stephen Innes said the ringgit closed with little change as traders refrained from expressing a strong opinion in anticipation of the US CPI release.

“However, I believe that the market is currently favouring a more natural approach. While higher oil prices usually benefit the ringgit, this may not be the case if it results in increased US yields,” he said.

“As a result, we may witness a clash between rising energy prices and higher US yields, particularly if the US inflation data exceeds expectations.”

The ringgit was traded mostly lower against a basket of major currencies.

It eased vis-a-vis the British pound to 5.8296/8334 from 5.8187/8251 yesterday, weakened versus the euro to 5.0350/0383 from 5.0175/0230, but rose against the Japanese yen to 3.1760/1783 from 3.1897/1934 previously.

The local unit traded higher against other Asean currencies.

The ringgit strengthened versus the Singapore dollar to 3.3948/3975 from 3.3979/4021 at yesterday’s close and improved against the Indonesian rupiah to 300.8/301.2 from 300.9/301.3 yesterday.

It gained vis-a-vis the Philippine peso to 8.12/8.13 from 8.13/8.14 yesterday and rose against the Thai baht at 13.0112/0264 from 13.0791/0998 previously. – Bernama, August 10, 2023.