KUALA LUMPUR (Bernama): The ringgit is expected to rise against the American dollar this week after the US nonfarm payrolls (NFP) data came in below expectations, boosting hopes for an interest rate cut in the United States later this month.
The US NFP came in at 22,000 jobs in August, well below consensus estimates of 75,000, while the US unemployment rate inched up to 4.3 per cent from 4.2 per cent in the previous month.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this indicates that the American labour market is weakening, which will prompt the US Federal Reserve (Fed) to shift its focus towards supporting economic growth.
"Hence, the odds for an interest rate cut at the upcoming US Federal Open Market Committee (FOMC) meeting on Sept 16-17 are rising. More importantly, the Fed needs to exhibit that they are on top of their game, especially when the present US administration is challenging their monetary policy independence,” he told Bernama.
Mohd Afzanizam said the US dollar-ringgit pair could range between RM4.20 and RM4.22 next week.
On a weekly basis, the ringgit ended the week lower against the greenback, closing at 4.2260/2320 versus 4.2230/2275 previously.
The local note traded higher against a basket of major currencies.
The ringgit appreciated vis-a-vis the Japanese yen to 2.8489/8531 from 2.8708/8741 in the previous week, strengthened against the British pound to 5.6793/6874 from 5.6833/6894 and rose versus the euro to 4.9203/9273 from 4.9291/9343.
The ringgit was traded mostly lower against ASEAN currencies, except against the Singapore dollar, where it climbed to 3.2775/2824 from 3.2859/2899 at the end of last week.
It slid against the Thai baht to 13.0666/0908 from 13.0327/0519 in the preceding week, decreased against the Indonesian rupiah to 257.3/257.7 from 255.9/256.3, and dipped against the Philippine peso to 7.40/7.42 from 7.39/7.40. - Bernama
