KUALA LUMPUR: The ringgit opened marginally better against the US dollar today, with the US Dollar Index remaining depressed after reversing from an 11-week high.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US dollar has been rather flat for now as markets await upcoming data on the employment market in the US later this week.
The non-farm payroll (NFP) will be announced on Friday with consensus estimates pegging the number to slow to 170,000 in August from 187,000 in the preceding month while the jobless rate is likely to remain at 3.5%, he noted.
Meanwhile, Afzanizam shared that the auction for two-year and five-year US Treasury bonds drew the highest yield since 2008, suggesting the bond market has anticipated that the interest rate hike has yet to settle down.
“On that note, the ringgit is expected to stay weak against the US dollar in the near-term as the market remains highly uncertain…whether the Federal Reserve (Fed) will change its stance amid the ongoing tightness in the labour market,” he said.
Additionally, he noted the inflation rate is also quite sticky with the Fed’s favourite inflation gauge, the core personal consumption expenditure, to be announced on Thursday, is expected to record 4.2% in July against 4.1% in June based on consensus estimates.
“We expect the ringgit against the US dollar to stay in the range of 4.64 to 4.66 in the near-term,” he told Bernama.
At 9am, the local currency stood at 4.6530/4.6555 against the greenback from 4.6535/4.6565 at Monday’s close.
Meanwhile, the ringgit also opened lower against a basket of major currencies.
The local currency decreased versus the euro to 5.0364/5.0391 from 5.0290/5.0323 at Monday’s close, slipped against the British pound to 5.8693/5.8724 from 5.8522/5.8560, and declined against the Japanese yen to 3.1772/3.1793 from 3.1752/3.1774 yesterday.
At the same time, the ringgit traded mostly lower against other Asean currencies.
It eased against the Singapore dollar to 3.4339/3.4360 from 3.4282/3.4307 at Monday’s close, and was flat against the Indonesian rupiah at 304.2/304.5 from 304.2/304.6 previously.
However, the local currency depreciated vis-a-vis the Thai baht to 13.1940/13.2063 from 13.1936/13.2088 on Monday and was marginally lower against the Philippine peso at 8.20/8.20 from 8.19/8.20.