KUALA LUMPUR: The ringgit surged to 4.11 against the greenback at the close on Thursday, hitting a new high in almost four and a half years, as weaker economic data in the United States continued to heighten expectations of a cut in US interest rates.
At 6 pm, the ringgit bounced to 4.1115/1165 versus the greenback compared to Wednesday's close of 4.1200/1235.
This was its highest level in four years and five months, beating the previous high last seen on June 16, 2021, when the ringgit closed at 4.1155.
IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said softer US economic data, mainly the sharp drop in the latest ADP employment report, has strengthened expectations of a US interest rate cut.
"The sharp drop in ADP payrolls - with private employment decreasing by 32,000 jobs in November after an upwardly revised 47,000 increase in October, has strengthened expectations of a cut (when the US Federal Reserve (Fed) meets next week)," he told Bernama.
Hence, he noted that there is growing confidence the Fed may begin policy normalisation next week, keeping the US dollar on the defensive and lending further support to Asian forex, including the ringgit.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market participants will also closely monitor two other key US economic indicators - initial jobless claims and the Challenger job cuts report, which are due tonight.
"Tonight, the initial jobless claims figures will be released with consensus pencilling in 219,000 compared to the prior week of 216,000. There is also data from the Challenger job cuts report, which measures the number of layoffs for November. In October, the number of job cuts shot up to 153,000 versus 54,000 in the previous month," he said, adding that these developments are expected to continue supporting the ringgit in the near term.
At the close, the ringgit trended lower against major currencies.
It fell versus the British pound to 5.4868/4935 from 5.4697/4744 at Wednesday's close, slid against the euro to 4.8014/8075 from 4.7982/8022, and edged down vis-à-vis the Japanese yen to 2.6555/6589 from 2.6476/6501.
However, the local note traded higher against ASEAN currencies.
It gained versus the Singapore dollar to 3.1747/1788 from 3.1810/1839 at Wednesday's close and climbed against the Indonesian rupiah to 246.8/247.3 from 247.7/248.1 previously. - Bernama
