KUALA LUMPUR, May 12 — The ringgit opened higher against a basket of major currencies, including the US dollar, ahead of the release of key United States (US) economic data later tonight that could reinforce expectations for the US Federal Reserve (Fed) to keep interest rates unchanged, said an analyst.

At 8am, the local unit inched up to 3.9200/9300 against the greenback, compared with yesterday’s close of 3.9220/9260.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US consumer price index (CPI) for April will be announced tonight, with headline and core CPI expected to increase by 3.7 per cent (March: 3.3 per cent) and 2.7 per cent (March: 2.6 per cent), respectively.

“Hence, the Fed may keep the rate steady while the odds for an interest rate cut this year would stay low.

“As such, the ringgit is expected to remain in sideways trading mode in the near term as the geopolitical risks remain heightened with a high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping set to take place this week,” he told Bernama.

At the opening, the ringgit traded mostly higher against a basket of major currencies.

It appreciated against the Japanese yen to 2.4925/4990 from 2.4955/4983 at Monday’s close and strengthened versus the British pound to 5.3312/3448 from 5.3331/3383 yesterday, but eased against the euro to 4.6162/6280 from 4.6150/6197 previously.

At the same time, the local currency was traded mixed against regional peers.

It was up against the Singapore dollar to 3.0883/0964 from 3.0887/0921 at the close yesterday, and gained against the Indonesian rupiah to 225.1/225.7 from 225.2/225.5 previously. 

However, the ringgit was almost flat against the Philippine peso to 6.41/6.43 from yesterday’s close of 6.41/6.42 and weakened versus the Thai baht to 12.1374/1759 from 12.0900/1083 previously. — Bernama

BEIJING, May 11 — China’s consumer prices ticked up in April as the cost of crude oil rose globally due to the Iran war, official data showed today.

Helped by the surging oil costs, factory gate prices also continued to show signs of recovery, rising for a second straight month after being stuck in negative territory since October 2022.

However, analysts warn deflation is still a threat for the world’s second-largest economy as prices in other sectors continue to fall and overcapacity remains a headache.

China’s consumer price index (CPI), a key measure of inflation, last month rose 1.2 per cent year-on-year, data from the National Bureau of Statistics showed.

The jump was due to “changes in international crude oil prices and increased demand for holiday travel”, according to Dong Lijuan, chief NBS statistician.

Domestic gas prices rose 19.3 per cent on-year, Dong said, impacted by international commodity price fluctuations.

A five-day holiday at the beginning of May also typically sees more travel and spending in the weeks preceding it.

However, last month’s CPI was still well below the government’s two per cent target for the year.

The April producer price index (PPI), which measures wholesale inflation, increased by 2.8 per cent on-year — up from 0.5 per cent in March.

It beat a Bloomberg forecast of 1.8 per cent and marked the quickest pace since July 2022, when the PPI rose by 4.2 per cent on-year.

The gauge slipped into negative territory that October and did not reverse until March.

“The rise in international crude oil prices drove up prices in domestic petroleum-related sectors,” the NBS’ Dong said in a statement, listing fuel processing and manufacturing of raw materials.

But analysts warn shocks caused by oil blockages in the Middle East are temporary.

“The fallout from the Iran War pushed up inflation again in April but price pressures remain narrow in scope and aren’t likely to build into a wider reflationary impulse”, Capital Economics said in a note.

“(With) overcapacity in most sectors unresolved and domestic demand growth still sluggish, the ingredients for a sustained reflationary impulse still appear to be missing.” — AFP