KUALA LUMPUR: MIDF Research foresees the ringgit to benefit slightly from the easing inflation rate in the United States (US) and expects the local note to appreciate gradually in the second half of 2023 (2H 2023) as chances of a rate pause rise.
Hence, the research house is maintaining its year-end forecast for the ringgit to touch RM4.20 per US dollar.
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The US consumer inflation decelerated to 3.0 per cent year-on-year (y-o-y) in June 2023, the lowest level since March 2021, and marginally lower than the 3.1 per cent expected.
"The easing inflation, among others, was due to the high-base effects, softer labour market and negative effects of the aggressive tightening by the Federal Reserve (Fed),” said MIDF Research in a note today.
It noted, however, that given the still elevated core inflation, another 25 basis points (bps) in July 2023 seems imminent before the Fed considers a pause.
At the opening today, the ringgit climbed 310 percentage in points (pips) to 4.6190/6230 against the greenback compared with 4.6500/6535 at Wednesday’s close, mainly due to the lower-than-expected US Consumer Price Index (CPI) data in June 2023.
On India’s industrial production data for May 2023, it said India's positive developments in industrial activities may benefit Malaysia’s exports, especially palm oil products.
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India’s industrial production improved by 5.2 per cent y-o-y in May 2023 versus the previous month's 4.5 per cent, beating market expectations of 4.8 per cent and the growth marked a three-month high.
Moreover, the research firm said India booked 18.8 per cent of Malaysia’s palm oil outbound shipment in May this year. - Bernama