KUALA LUMPUR (Bernama) -- The foreign exchange market is expected to remain cautious this week, with the ringgit likely to oscillate around 4.00 to 4.05 against the US dollar amid ongoing uncertainties over the war in Iran, which has entered its fifth week.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this followed the release of the United States Non-Farm Payroll Data last night, which would guide the US Federal Funds Rate toward the end of April.
According to data released by the US Bureau of Labour Statistics, the US economy added 178,000 jobs in March, surpassing expectations of 60,000.
However, February’s figure was revised lower to a decline of 133,000 jobs from the previously reported drop of 92,000.
The US unemployment rate edged down to 4.3% from 4.4%.
The latest data reinforced expectations that the Federal Reserve will remain patient before implementing any rate cuts amid persistent oil-driven inflation risks.
This has led traders to scale back expectations for rate cuts and increasingly priced in a prolonged pause, with interest rates now seen remaining unchanged through 2026, which could lend further support to the US dollar.
Meanwhile, Kenanga Investment Bank Bhd (Kenanga IB) said the ringgit is set for another cautious week near 4.05 to the US dollar as geopolitical tensions and supply risks persist.
"The ringgit is likely to weaken toward 4.05 against the US dollar as volatile geopolitical rhetoric and supply risks weighed on local sentiment,” the investment bank said.
Conflicting ceasefire reports followed by renewed escalations have triggered sharp swings in risk appetite.
"Brent crude oil price holding above US$100 per barrel continues to stoke global inflation concerns and support the greenback. Consequently, investors maintain defensive US dollar positions while awaiting clarity on Iranian guarantees for regional shipping lanes,” Kenanga IB added.
On a week-on-week basis, the ringgit settled lower against the US dollar at 4.0295/0350 on Friday, compared with 4.0105/0140 at the end of the previous trading week.
The local note also traded lower against a basket of major currencies this week. It rose against the British pound to 5.3326/3399 from 5.3368/3414 a week ago, edged down versus the Japanese yen to 2.5247/5285 from 2.5084/5109 previously, and eased against the euro to 4.6513/6576 from 4.6197/6237.
Against Asean peers, the ringgit depreciated versus the Singapore dollar to 3.1341/1389 from 3.1164/1194 last week, fell against the Thai baht to 12.3585/3841 from 12.1903/2077, declined versus the Indonesian rupiah to 237.2/237.7 from 236.1/236.5, and eased against the Philippine peso to 6.68/6.71 from 6.62/6.63 a week ago. - Bernama
