Selangor Journal

Stronger greenback puts ringgit under pressure

KUALA LUMPUR, July 12 — The ringgit ended weaker against the US dollar on Tuesday following stronger-than-expected US monthly jobs data for June.

This has boosted the US Dollar Index (DXY) value to surpass 108 points, the first time since October 2002.

At 6pm, the local currency depreciated versus the greenback to 4.4385/4405 from Friday’s close of 4.4250/4270.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the closely-watched US non-farm payrolls (NFP), which came in more-than-expected in June to 372,000 against the consensus projection of 268,000, would certainly lend further support for another 75-basis points (bps) hike in the Fed Funds Rate.

‘’If this materialises, the Fed Funds Rate would be at 2.50 per cent by the end of July and appears to be on track to achieve the Federal Reserve’s (Fed) members’ forecast level of 3.40 per cent by end-2022.

“It looks like normalising monetary policy is at the forefront of the Fed’s strategy, which makes the US dollar more appealing,’’ he told Bernama.

On the home front, according to analysts, Bank Negara Malaysia (BNM) is expected to raise the Overnight Policy Rate (OPR) one more time during its September meeting by another 25 bps to 2.50 per cent.

The ringgit was traded mostly firmer against a basket of major currencies.

It strengthened against the British pound to 5.2539/2562 from 5.2888/2912 on Friday and was higher vis-à-vis the Japanese yen to 3.2414/2431 from 3.2577/2595 and increased versus the euro to 4.4456/4476 from 4.4777/4797 previously.

The local unit, however, was lower against the Singapore dollar at 3.1539/1556 from 3.1528/1547 recorded last Friday.

The market was closed yesterday in lieu of the Hari Raya Aidiladha public holiday which fell on Sunday.

— Bernama

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