KUALA LUMPUR: The ringgit continues its uptrend to open higher against the US dollar today as the greenback traded in a cautious mode ahead of the United States (US) nonfarm payrolls data (NFP) for August to be released later today, said an analyst.
At 9 am, the local note stood at 4.6310/6360 against the US dollar from 4.6365/6405 at Wednesday’s close
SPI Asset Management managing director Stephen Innes noted that the US dollar is currently trading strongly against the euro, while the ringgit is receiving relief from both the US rates channel and recent measures taken in China's property sector.
He noted that China’s policymakers’ move to reduce mortgage rates to revive the republic’s beleaguered property sector had brought about positive sentiment to the market.
"These measures have led to the Chinese yuan and oil prices trading stronger, which is favourable for the ringgit. Meanwhile, the US 10-year yields are near a two-week low before the US NFP is released. This is also viewed positively for the ringgit this morning.
"However, with US NFP looming, it is possible that further gains beyond the opening flurry could be challenging ahead of the key jobs report,” he told Bernama.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid shared that the US core personal consumption expenditures (PCE) index, the favourite inflation gauge by the Federal Reserve (Fed), came in within consensus expectation of 4.2 per cent for July (June: 4.1 per cent) while the four-week moving average jobless claims is gradually rising to 237,500 last week from 237,250 in previous week.
"This suggests that the Fed might continue to maintain its restrictive stance in the upcoming meeting in September. Despite that, the ringgit versus the US dollar has been in oversold condition from the technical standpoint and it has been in such situation for quite sometime.
"The way we see it, data points have been somewhat mixed but leaning towards a weakening bias, implying the US monetary policy should be less restrictive going forward. In that sense, the ringgit could linger near its support level of RM4.6257,” he added.
Meanwhile, the ringgit also opened mostly higher against a basket of major currencies.
The local note increased versus the euro to 5.0186/0240 from 5.0482/0526 at Wednesday's close, improved against the British pound to 5.8638/8701 from 5.8684/8735, but declined against the Japanese yen to 3.1813/1852 from 3.1679/1708.
At the same time, the ringgit traded mixed against other Asean currencies.
It gained against the Singapore dollar to 3.4261/4303 from 3.4278/4311 at Wednesday’s close, and was better against the Indonesian rupiah at 304.0/304.5 from 304.1/304.6 previously.
However, the local currency depreciated vis-a-vis the Thai baht to 13.2133/2329 from 13.2094/2268 on Wednesday and was also easier against the Philippine peso at 8.18/8.19 from 8.17/8.18.
The domestic market was closed yesterday for the National Day public holiday. - Bernama
