Ringgit slips ahead of crucial US inflation data release

KUALA LUMPUR: The ringgit traded lower against the US dollar on Monday as investors await the US January consumer price index (CPI) figure, the first for the year, scheduled to be released on Tuesday to gauge the Federal Reserve’s monetary policy future path.

At 6 pm, the ringgit eased to 4.3575/3625 against the greenback from Friday’s close of 4.3320/3350.

SPI Asset Management managing director Stephen Innes said the higher US used car prices and service employment data gave hints that the inflation number could come in stronger-than-expected, so the US yields would rise to the occasion and this would weaken the ringgit.

“In addition, the uptick in US-China tension is also weighing on Asian currencies after the US Air Force took down another possible Chinese balloon,’’ he told Bernama.

A higher inflation number could lead markets to revisit the possibility of higher-for-longer interest rates.

Nevertheless, Innes said if the CPI print fails to print above grade, an improving macro backdrop could cheapen the US dollar.

Back home, the ringgit traded mostly lower against a basket of major currencies, except the Japanese yen, against which it strengthened to 3.2837/2877 from 3.3089/3114 last Friday.

The local note depreciated against the Singapore dollar to 3.2697/2739 from 3.2635/2663, weakened versus the euro to 4.6521/6574 from 4.6391/6424, and fell vis-a-vis the British pound to 5.2447/2507 from 5.2404/2440 previously. – Bernama

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