KUALA LUMPUR, July 31 — The ringgit closed higher against the greenback today, driven by a softer US dollar due to weaker data released last week, coupled with the bearish outlook for the currency, an analyst said.

At 6pm, the local note strengthened to 4.5050/5090 against the US dollar compared with 4.5535/5565 at Friday’s close.

A dealer said that the greenback may be headed for a monthly loss on expectation that the US Federal Reserve’s aggressive rate-hike cycle could have concluded with last week’s 25-basis-point increase.

He said that data released last week implied that the annual US inflation rate rose at its slowest pace in more than two years in June, and with the underlying price pressure receding, it eased the pressure on the Federal Open Market Committee (FOMC) to continue raising rates.

"In the near term, the dollar might continue on a downtrend mode, weighed by market view that the FOMC is done with its (rate) tightening cycle,” he said.

In the meantime, the ringgit traded higher against a basket of major currencies.

It increased against the Japanese yen to 3.1658/1689 from 3.2691/2715 last Friday, firmed versus the euro to 4.9690/9734 from 4.9966/9998 and improved vis-a-vis the British pound to 5.7916/7968 from 5.8362/8401 previously.

At the same time, the local unit traded higher against other Asean currencies.

The ringgit rose versus the Singapore dollar to 3.3877/3910 from 3.4183/4208 at the close on Friday and went up vis-a-vis the Philippine peso to 8.20/8.22 from 8.29/8.31 previously.

The local unit appreciated against the Indonesian rupiah to 298.6/299.1 from 301.4/301.8 last Friday and was higher against the Thai baht at 13.1594/1765 from 13.2058/2218 previously. — Bernama