Malaysia anticipates the release of its first-quarter economic data, while the latest data from the United States suggests a cooling down of inflation. The ringgit, however, ended on a downtrend against the US dollar.
On Wednesday (11th), the US dollar index dipped 0.1% to 101.477. However, as the US producer price index (PPI) and the Bank of England interest rate decision loom, the US dollar index saw a significant rise, approaching 101.90.
According to Bank Negara data, at 9 am, the ringgit stood at 4.4520 against the US dollar, marking a 0.16% increase from the previous day’s 4.459. However, the gains narrowed during the market break, with the ringgit trading at 4.4570, up 0.04%.
In the afternoon, the ringgit surrendered its gains and entered a downward trend, ultimately ending at 4.466, representing a depreciation of 0.15%.
The US Bureau of Labor Statistics is scheduled to release the US producer price index for April on Thursday night Malaysia time. Investors are keen to find more clues regarding the Federal Reserve’s outlook on interest rates.
Additionally, the Bank of England will announce its interest rate resolutions and meeting minutes. Market observers will closely monitor whether the Bank of England will follow the Fed’s signal to pause interest rate hikes.
Amosahota, the head of foreign exchange at Klarity, commented on the pullback in US inflation, saying, “I think the data does suggest that the Fed has room to pause rather than have to raise rates. I don’t think that means we’re going to cut rates significantly. In June, before the next Fed meeting, we will see inflation data for May. So that will give the meeting a better focus.”
The upcoming economic data releases and central bank decisions in the US and the UK will play a crucial role in shaping market sentiments and potentially impacting the performance of the ringgit. Traders and investors will closely analyze these developments to gauge the future trajectory of currencies and formulate their strategies accordingly.