Selangor Journal
Photo for illustration purposes only. — Picture by REUTERS

Ringgit lower against US dollar in early session

KUALA LUMPUR, May 9 — The ringgit was traded easier against the US dollar in the early session today amid stronger demand for the greenback, said an analyst.

At 9.05 am, the local note was pegged at 4.3745/3780 versus the greenback from Friday’s close of 4.3650/3680.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) has been lingering above 103 points as economic data in the US remain robust.

“The latest Nonfarm Payroll (NFP), which came in at 428,000 in April 2022, was higher from consensus estimates of 380,000 while the jobless rate was sustained at 3.6 per cent for two consecutive months.

“In that sense, the US Federal Reserve(Fed) will remain hawkish in their monetary stance in the immediate term which will then support the value of the US dollar,” he told Bernama.

Mohd Afzanizam added that for this week, all eyes will be on Bank Negara Malaysia’s (BNM) decision on the overnight policy rate (OPR) on May 11.

“We foresee BNM would maintain its benchmark interest rate as downside risks to growth remain highly visible while the inflation rate is still fairly contained,” he said.

Meanwhile, SPI Asset Management managing partner Stephen Innes said US yields will be a function of Fed inflation-fighting policy if this week’s US Consumer Price Index (CPI) comes in higher than expected.

“The US dollar could strengthen as it would imply the Fed needs to raise the Fed funds rate faster to tame inflation,” he said.

Besides, he noted that the direction of travel for the ringgit will depend on what is happening in China pertaining to lockdowns and Covid-19 policy.

“An even more protracted lockdown in China could hurt the ringgit through yuan’s weakness,” he added.

Meanwhile, the ringgit was traded higher against a basket of major currencies.

It appreciated against the Singapore dollar to 3.1473/1501 from Friday’s close of 3.1523/1549 and increased vis-a-vis the British pound to 5.3819/3863 from 5.3868/3905.

The local note strengthened versus the Japanese yen to 3.3447/3476 from 3.3453/3479 and appreciated against the euro to 4.6002/6039 from 4.6138/6170.

— Bernama

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