BERNAMA – The ringgit has extended its uptrend against the United States (US) dollar yesterday morning in anticipation of softer interest rate hikes in the US, after the latest US inflation data showed a declining trend.
At 9am, the ringgit rose to 4.4795/4835 versus the greenback from yesterday’s closing rate of 4.4820/4860.
ActivTrades trader Dyogenes Rodrigues Diniz said the US Consumer Price Index (CPI) reading for February was exactly as expected at 6.0 per cent, below January’s reading of 6.4 per cent.
“This suggests that inflation in the US is slowing down at the moment, thus the Federal Reserve may adopt a milder stance regarding the next interest rate decision on March 22,” he said.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid opined that the latest inflation print left the Federal Reserve in a pickle.
“On one hand, their concerns over stubbornly high inflation would mean they need to do more in raising the Fed Fund Rate.
“On the other, the heightening concern over the US banks such as the Silicon Valley Bank serves as a reminder that overly tight monetary policy could do more harm than good,” he told Bernama.