KUALA LUMPUR: The ringgit opened higher against the greenback today as the latest economic data in the United States strengthens hopes for an early US interest rate cut, said an analyst.
-Advertisement-
At 9.05 am, the ringgit appreciated to 4.5955/6005 against the US dollar from Thursday’s close of 4.6055/6125.
SPI Asset Management managing director Stephen Innes said the weak economic data in the United States, which included a higher-than-expected unemployment rate and disappointing home sales figures, should negatively impact the US dollar.
“Currently, the main issue in the foreign exchange (FX) markets is that they are pricing in a potential interest rate cut of 150 basis points, with an expected cut in March next year. However, the US Federal Reserve (Fed) is only indicating a 75 basis points cut starting in the second half of the year.
“This discrepancy will be resolved once we receive the first US non-farm payroll report in early January.
“A robust jobs report could delay an early Fed rate cut, while a weak report is likely to solidify the expectation of a rate cut in March and lead to a significant weakening of the US dollar,” he told Bernama.
The local note traded higher against a basket of major currencies.
-Advertisement-
It appreciated against the Japanese yen to 3.2452/2489 from 3.2723/2776 on Thursday, rose against the euro to 5.0900/0955 from 5.1242/1323 and strengthened vis-a-vis the British pound to 5.8537/8601 from 5.8932/9022 at yesterday’s close.
The ringgit was also traded higher against Asean currencies.
It was higher against the Singapore dollar at 3.4830/4871 from 3.4972/5031 and improved vis-à-vis the Philippine peso to 8.28/8.30 from 8.30/8.31 at yesterday’s close.
The local currency edged up against the Indonesian rupiah to 298.0/298.5 from 298.6/299.3 and strengthened against the Thai baht to 13.4050/4282 from 13.4979/5260, previously.
– Bernama
– TheStar