Kuala lumpur: The ringgit experienced a downturn against the US dollar today, as market sentiment remained cautious in anticipation of the United States' May Consumer Price Index (CPI) data release. At 6 pm, the local currency weakened to 4.0670/0715 compared to the previous day's close of 4.0580/0630.

According to BERNAMA News Agency, Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, highlighted that the upcoming US CPI data would be closely watched, with consensus estimates predicting a 4.2 percent increase in May, surpassing the US Federal Reserve's (Fed) target of two percent. Dr Mohd Afzanizam noted that the ringgit had remained relatively stable around the RM4.06 mark. However, regional developments, particularly the unexpected interest rate hike by the Bank of Indonesia, impacted market sentiment amidst a robust US labor market, which could signal a potential interest rate hike by the Fed. These conditions have been favorable for the US dollar, contributing to the ringgit's softer position.

Despite the ringgit's decline, Dr Mohd Afzanizam pointed out that the latest international reserves from Bank Negara Malaysia (BNM), amounting to US$130.6 billion, indicate sustained demand for the local currency. Nevertheless, the ringgit traded lower against a basket of major currencies. It decreased against the Japanese yen to 2.5347/5377 from the previous 2.5332/5365, weakened against the British pound to 5.4486/4546 from 5.4329/4395, and fell against the euro to 4.7006/7058 from 4.6915/6972.

The ringgit also softened against its regional counterparts. It depreciated against the Singapore dollar to 3.1591/1628 from 3.1563/1604, dropped against the Thai baht to 12.3688/3871 from 12.3531/3732, fell against the Philippine peso to 6.62/6.63 from 6.59/6.60, and slid against the Indonesian rupiah to 226.6/227 from 224.7/225.1.