KUALA LUMPUR, Jan 4 — The ringgit remained weak against the US dollar today after some letdown as hopes for a March rate cut faded after the US Federal Open Market Committee (FOMC) meeting minutes provided little clue about when it will happen.
At 9.01 am, the ringgit depreciated to 4.6400/6445 versus the US dollar from Wednesday’s close of 4.6300/6355.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the minutes indicated that the appropriate timing to reduce the rate given the US’s latest inflation forecast would be at the end of 2024.
“This has lent credence to the higher for longer narratives.”
On that note, he believed the ringgit versus the US dollar is likely to remain weak in the near term, lingering around RM4.63 to RM4.65.
“Tonight, the payrolls processing firm ADP employment change report will be closely monitored as the market seeks direction for the strength of the US labour market, whereby the consensus estimates have penciled in 125,000 jobs created in the private sector in December against 103,000 in the prior month.
“On Friday, the most anticipated statistics, the Nonfarm Payroll (NFP), will be released with consensus estimates projecting it to come down to 171,000 in December from 199,000 in November,” he said, adding these incoming data will determine the market sentiments on the path of the Fed Fund Rates.
Mohd Afzanizam noted that a stronger-than-expected outturn will uplift the value of the US dollar.
Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.
It weakened against the British pound to 5.8780/8837 from 5.8463/8532 on Wednesday and eased versus the euro to 5.0678/0727 from 5.0634/0694.
The local unit appreciated against the Japanese yen to 3.2389/2422 from 3.2462/2502 yesterday.
The ringgit was traded mostly mixed against Asean currencies.
It fell against the Singapore dollar to 3.4919/4955 from 3.4885/4932 at yesterday’s close and slipped versus the Indonesian rupiah to 299.6/300.1 from 299.0/299.5.
The ringgit, however, was higher versus the Philippine peso at 8.32/8.34 from 8.33/8.34 on Wednesday’s close and was better against the Thai baht at 13.4559/4772 from 13.4824/5063 yesterday.
— Bernama
