KUALA LUMPUR: The ringgit closed higher against the US dollar today on the expectation that US interest rate hikes are over after dovish comments by US Federal Reserve chairman Jerome Powell on Friday.
Also at play are the nonfarm payrolls data (NFP) and the jobless rate in the US for November to be released this week which could further influence the outlook for US interest rates, especially concerning hopes for an early rate cut.
Bank Muamalat Malaysia chief economist Afzanizam Abdul Rashid said the ringgit broke through its immediate resistance level of RM4.6611 today.
“At the moment, the ringgit is trading at around RM4.6568 with the next (resistance) level located at RM4.5778 based on the Fibonacci retracement charts,” he told Bernama.
Powell on Friday pushed back on market expectations for aggressive interest rate cuts ahead.
However, the remarks gave some credence to the idea that the Fed at least is done hiking rates with the Fed chief noting that US inflation “is moving in the right direction”.
“Markets largely took Powell’s comments as dovish.
“From a technical standpoint, further appreciation of the ringgit looks limited as the US dollar-ringgit pair is already at or near the overbought condition,” Afzanizam added.
On the upcoming US economic data this week, Afzanizam said that based on a survey, the NFP is expected to rise to 180,000 in November after dipping to 150,000 in October while the unemployment rate is expected to be sustained at 3.9% (October: 3.9%) for the same month.
At 6pm, the ringgit rose to 4.6550/4.6600 against the greenback from Friday’s close of 4.6710/4.6760.
At the close, the ringgit was traded higher versus a basket of major currencies.
It appreciated further vis-a-vis the euro to 5.0623/5.0677 from 5.0900/5.0954 at Friday’s close and was also higher against the British pound at 5.8997/5.9061 from 5.9168/5.9231 previously.
However, the local note eased against the Japanese yen to 3.1751/3.1787 from 3.1591/3.1627 previously.
Meanwhile, the local note strengthened against other Asean currencies.
It was higher versus the Singapore dollar at 3.4882/3.4925 from 3.4973/3.5016 on Friday, firmed against the Thai baht to 13.3183/13.3368 from 13.3301/13.3505 previously, improved against the Indonesian rupiah at 300.9/301.5 from 301.5/302.1 and rose versus the Philippine peso to 8.41/8.42 from 8.43/8.44.