Ringgit, regional currencies seen under pressure next week as strong US jobs data bolsters greenback
KUALA LUMPUR: The ringgit and other regional currencies are expected to come under pressure next week, with the local currency seen trading between RM4.04 and RM4.06 against the US dollar.
KUALA LUMPUR: Regional currencies, including the ringgit, are anticipated to face challenges next week as the US dollar gains strength following strong non-farm payrolls (NFP) data released overnight. The stronger-than-expected NFP data has increased the likelihood of a US interest rate hike, which has supported the greenback. Market focus will remain on upcoming US economic data, particularly the Consumer Price Index (CPI) report due next Friday, which analysts believe will be a crucial factor in the Federal Open Market Committee (FOMC) members' decision on the Fed Funds Rate, currently at 3.50 to 3.75 percent.
Bank Muamalat Malaysia Bhd chief economist, Dr Mohd Afzanizam Abdul Rashid, stated that the US CPI will be a critical data point as FOMC members convene the following week to discuss the Fed Funds Rate. The impressive NFP figure for August, at 162,000, significantly surpassing the anticipated 55,000, signals that the Federal Reserve may raise interest rates during their upcoming meeting on September 15 and 16.
This week, Bank Negara Malaysia's Monetary Policy Committee decided to keep the Overnight Policy Rate (OPR) steady at 2.75 percent during their meeting on Thursday. The MPC affirmed that the current OPR level is appropriate for ensuring price stability and sustainable economic growth. They emphasized that they will continue to monitor developments and evaluate the risks related to domestic inflation and growth.
On a weekly basis, the ringgit weakened against the greenback, trading between RM4.0425 and RM4.0465 from RM4.0230 and RM4.0270 the previous week. The local currency experienced further depreciation against a basket of major currencies during the week, falling against the British pound from 5.4632/4687 to 4.0425/0465, the Japanese yen from 2.5193/5219 to 2.5832/5860, and the euro from 4.6828/6874 to 4.6962/7008.
The ringgit also traded mostly lower against ASEAN currencies, strengthening only against the Philippine peso from 6.54/6.55 to 6.46/6.47, weakening against the Singapore dollar from 3.1652/1686 to 3.1888/1923, declining against the Indonesian rupiah from 227.3/227.7 to 229.1/229.4, and falling further against the Thai baht from 12.2087/2253 to 12.2693/2863.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
