KUALA LUMPUR, Nov 7 — The ringgit opened higher against the greenback as the United States (US) reported a higher unemployment rate and lower wage inflation last Friday.
Indications of a smaller interest rate hike at the next US Federal Reserve (Fed) policy meeting further lifted sentiment for the local currency, an analyst said.
At 9am, the local note rose marginally to 4.7430/7460 against the greenback from Friday’s close of 4.7460/7495.
Bank Islam Malaysia Bhd chief economist Firdaos Rosli said while the recent US jobs report showed softening labour market conditions due to the uptick in the unemployment rate (October: 3.7 per cent versus Sept: 3.5 per cent), the hiring was still strong, registering 261,000 versus an estimation of 200,000 in October. This signalled that the US economy remained resilient.
“Though the Fed hinted at smaller rate hikes moving forward, such a decision would ultimately be data-driven. The local note could be less favourable should there be any unexpected results in the upcoming US October consumer price index (CPI), as well as the country’s midterm election outcome on November 8,” he told Bernama.
Firdaos said the ringgit could continue to be pressured against the US dollar amid rate differentials and uncertainties over the15th general election (GE15).
However, the local note strengthened against other major currencies, namely the British pound (3.1 per cent), the Australian dollar AUD (1 per cent) and the euro (1.5 per cent) in the past week.
Both external headwinds and domestic factors, especially on the political front, would influence the trajectory of the ringgit, he said.
Malaysia in is the midst of a general election, with voters going to the polls on November 19.
“We believe that the better-than-expected third quarter (3Q) 2022 economic growth could lend support for the ringgit outlook during the week.
“Considering the above matters, we foresee the weekly range of the ringgit trading between RM4.74 and RM4.75,” said Firdaos.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
It depreciated against the Singapore dollar to 3.3688/3715 from 3.3517/3546 at Friday’s close and eased vis-a-vis the Japanese yen to 3.2263/2286 from 3.2111/2137 previously.
The local note fell against the British pound to 5.3719/3753 from 5.3231/3270 and weakened against the euro to 4.7103/7133 from 4.6383/6417 at Friday’s close.
— Bernama
