Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit is likely to be well supported today, with the US dollar-ringgit expected to trade between RM4.20 and RM4.23 amid a high probability of a US interest rate cut.

He noted that the softer US inflation rate of 2.7% in July was largely driven by a moderation in the Owner’s Equivalent Rent to 4.1%, after holding at 4.2% for two straight months.

OER accounts for about 25% of the consumer price index weightage, he said.

“The US benchmark equity indices rose more than 1%, while the yield on the two-year US Treasury note fell by four basis points to 3.73%.

“This suggests that the lower-than-expected headline inflation has strengthened expectations for a US rate cut, fuelling the rally in the equities market,” he told Bernama.

At the opening, the ringgit, however, traded mostly lower against major currencies.

At 8 am, the local note rose to 4.2115/4.2285 against the greenback from Tuesday’s close of 4.2290/4.2320.

It fell versus the Japanese yen to 2.8502/2.8619 from Tuesday’s close of 2.8490/2.8512 and declined against the euro to 4.9182/4.9380 from 4.9090/4.9125 yesterday.

But against the British pound, the local note appreciated to 5.6876/5.7106 from 5.6905/5.6946.

The ringgit trended higher against regional peers.

It advanced against the Singapore dollar to 3.2825/3.2960 from 3.2867/3.2893 at yesterday’s close and strengthened versus the Thai baht to 12.9965/13.0570 from 13.0135/13.0300.

The local note also appreciated versus the Indonesian rupiah to 258.5/259.6 from 259.6/259.9 previously and rose vis-a-vis the Philippine peso to 7.38/7.41 from 7.41/7.42