KUALA LUMPUR: The ringgit strengthened further against the US dollar at today’s opening as weaker data from the US bolstered expectations of a rate cut, according to an analyst.
At 9 am, the ringgit rose to 4.7065/7100 against the greenback, up from Thursday's close of 4.7080/7100.
Bank Muamalat Malaysia Bhd chief economist, Mohd Afzanizam Abdul Rashid said weaker economic data from the United States signals a softening economy, reinforcing the need for the Federal Reserve to ease monetary policy to stimulate growth.
"Market participants await the Nonfarm Payroll result tonight, expected to drop to 190,000 in June from 272,000 in the prior month.
"A weak labour market would support the view that the US Federal Reserve will reduce the benchmark interest rate to steer the growth trajectory to a more sustainable level," he said.
Mohd Afzanizam said the elevated level of inflation remains a significant concern, necessitating a restrictive monetary policy.
"Essentially, the Fed is at a crossroads between easing its policy to maintain growth and ensuring inflation moves towards the two per cent goal. Data points will guide any possible shift in the monetary policy stance," he added.
Meanwhile, the ringgit traded lower against a basket of major currencies.
The local note slid further against the Japanese yen to 2.9217/9242 from Thursday’s 2.9195/9209 and opened lower at 6.0069/0114 against the British pound from 6.0022/0048 yesterday.
It also fell against the euro to 5.0896/0934 from 5.0837/0859 previously.
The ringgit also closed mostly lower against its ASEAN peers but inched up against the Indonesian rupiah.
It edged up versus the Indonesian rupiah to 288.1/288.5 from 288.2/288.5 at Thursday’s close but slipped against the Singapore dollar to 3.4840/4868 from 3.4830/4848 yesterday and eased to 12.8572/8713 against the Thai baht from 12.8483/8590 previously.
The local note also weakened against the Philippine peso to 8.04/8.06 from yesterday’s close of 8.03/8.04. - Bernama
