KUALA LUMPUR, April 7 — The ringgit opened marginally lower against the US dollar today on the expectation of a pause in the United States Federal Reserve’s Fund Rate in the next meeting from May 2 to May 3, 2023.
The expectation was premised on the United States (US) Initial Jobless Claims data which came in higher than expected (228,000 real against 200,000 forecast), said an analyst.
At 9.02am, the local note fell to 4.4000/4050 versus the US dollar from Thursday’s closing rate of 4.3950/4010.
Bank Muamalat Malaysia Bhd chief economist and social finance Mohd Afzanizam Abdul Rashid said the higher-than-expected Initial Jobless Claims data suggests that the labour markets are softening, resonating with the ADP Employment Change which fell to 145,000 in February (January: 242,000).
“This appears to have bolstered the expectation of a pause in the Fed Fund Rate in the Federal Open Market Committee (FOMC) meeting on from May 2 to May 3.
“As such, we expect the dollar-ringgit (USD/MYR) to stay in the RM4.39-RM4.40 region today,” he told Bernama, adding the market will also be focusing on the US non-farm payrolls (NFP) report which will be released tonight.
The Initial Jobless Claims is an economic indicator released every Thursday which measures the number of people who filed for unemployment insurance for the first time during the previous week.
At the same time, ActivTrades trader Dyogenes Rodrigues Diniz said a higher-than-expected reading tends to be negative for the US dollar because it means that a higher number of people have lost their jobs.
“From a technical point of view, the USD/MYR is in a bearish trend and may continue falling towards the 4.3850-4.3650 region,” he added.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies.
It appreciated against the Japanese yen to 3.3399/3440 compared with 3.3465/3514 at Thursday’s close and went up versus the British pound to 5.4718/4781 from 5.4753/4828 previously, but decreased vis-à-vis the euro to 4.8026/8081 from 4.7936/8002 at yesterday’s close.
Concurrently, the ringgit traded mostly lower against Asean currencies.
The local note was lower vis-à-vis the Indonesian rupiah at 295.00/295.40 from 294.70/295.20 at Thursday’s close, edged down against the Thai baht to 12.8919/9175 from 12.8893/9145 yesterday and weakened against the Philippines peso at 8.08/8.10 from 8.07/8.09 previously.
However, it traded flat versus the Singapore dollar at 3.3065/3105 from 3.3065/3113 yesterday.
— Bernama
