KUALA LUMPUR: The ringgit ended lower against the US dollar today as the United States (US) non-farm payrolls data rattled the Asian foreign exchange, an analyst said.
SPI Asset Management managing director Stephen Innes said US Treasury yields surged higher while global equities dropped after the US non-farm payroll data released last Friday -- a double whammy for the ringgit.
At 6 pm, the ringgit ended the day at 4.2995/3055 against the greenback from Friday’s close of 4.2565/2610.
"Now the lack of carry, meaning higher US Treasury yields relative to Malaysian Government Securities (MGS) are dissuading investors to get back into the ringgit trade, despite the strong China reopening impulse.
"The uptick in geopolitical risk after the US shot down a Chinese weather balloon also took a toll on Asian flows,” he said to Bernama.
Nonetheless, he said that China’s economy is set for recovery, which should boost exports from Malaysia.
Innes also views the current sell-off as a transitory speed bump and expect the ringgit to trade stronger in March.
"The one caveat is we might turn more neutral if the US Federal Reserve (Fed) signals they need another rate hike this year, beyond the two 25-basis point hikes currently expected,” he added.
Last Friday, the US released January’s non-farm payroll data, revealing that 517,000 jobs were created in January, thus indicating the continued strength of the country’s labour market despite its tighter monetary policy.
US Treasury yields climbed on Monday as investors assessed the economic outlook ahead of the Fed’s speaker remarks slated for the week.
The 10-year US Treasury yield was up by nearly 12 basis points at 3.651 per cent -- Monday marked the first time it rose above 3.6 per cent since Jan 11-- while the two-year Treasury yield was trading at 4.485 per cent.
Meanwhile, the ringgit traded higher against a basket of major currencies.
The local note inched up against the Singapore dollar to 3.2420/2470 from Friday’s close of 3.2475/2514 and strengthened vis-a-vis the Japanese yen to 3.2624/2672 from 3.3106/3147.
The ringgit appreciated against the British pound to 5.1624/1696 from 5.2125/2180 and rose versus the euro to 4.6065/6129 from 4.6519/6568. - Bernama