kuala lumpur: Ringgit trading is expected to remain cautious next week, with focus on key data points such as US non-farm payrolls (NFP) data, which will be critical to ringgit vs. USD performance.
Muamarat Malaysia Bank chief economist Dr Mohd Afzanizam Abdul Rashid said next week’s trading in the ringgit will be tentative.
“If the NFP performs better than expected, the ringgit could remain weak next week, perhaps at 4.65 ringgit, which is quite close to the near-term resistance level of 4.6611 ringgit,” he told Bernama. There is a possibility that it will be around the ringgit.”
Meanwhile, SPI Asset Management managing director Stephen Innes said economists expected around 170,000 jobs to be added.
An overly strong report could be a setback for the local currency as it would eliminate short-term interest rate cut expectations in the second half of 2024.
Conversely, he said if the report is in line with expectations or slightly lower than expected, it could strengthen the view that a rate cut is imminent and cause the ringgit to appreciate.
“Asia’s foreign exchange markets are at a disadvantage amid speculation of a US interest rate cut.
“NFP could trigger a significant recovery in gold and local currency units. So next week, the overall outlook for assets will ultimately be determined by the US jobs report,” he said.
In the week just ended, local notes fell on expectations that the upward trend in long-term interest rates is likely to continue.
From Friday to Friday, the ringgit stood at 4.6525/6580 ringgit against the US dollar, down from 4.5900/5980 ringgit the previous week.
The local currency also nearly depreciated against other major currencies.
Against the Japanese yen, it rose to 3.2038/2078 from 3.2356/2415 the previous week, but against the British pound it fell from 5.8321/8422 to 5.8891/8961, and against the euro it fell from 5.0729/0817 to 5.0763/0823. Last Friday’s closing price.
The ringgit also weakened against several ASEAN currencies.
The Singapore dollar fell to 3.4944/4988 from 3.4746/4812 a week ago, while the Thai baht fell to 13.4001/4236 from 13.3422/3760.
The ringgit depreciated against the Indonesian rupiah to 299.8/300.3 from 298.1/298.6 last Friday, and against the Philippine peso it depreciated to 8.37/8.38 from last week’s closing price of 8.28/8.31. –bernama
