KUALA LUMPUR: The ringgit ended lower against the US dollar for the third consecutive day despite signs that a weak labour market in the US could tilt the US Federal Reserve’s (Fed) monetary stance towards an easing bias.
According to the most recent Job Opening and Labor Turnover Survey, job openings in the US fell to 8.7 million in October, down from the record high of 12 million in March 2022, below the anticipated 9.3 million according to consensus estimates.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the lower-than-anticipated number of US job openings clearly indicated that the diminishing demand for labour might prompt a reconsideration of the monetary policy stance among members of the Federal Open Market Committee (FOMC).
“This is particularly significant as achieving maximum employment is one of its dual mandates, the other being price stability, which is related to inflation,” he told Bernama.
Afzanizam said there appeared to be a positive relationship after examining the correlation between the Job Opening Rate (JOR) and the growth in Average Hourly Earnings (AHE).
“Consequently, if businesses opt to reduce their workforce, it could lead to lower wages, thereby impacting inflation, given its connection to wage growth,” he added.
Meanwhile, Afzanizam said China’s trade data showed some improvements, with exports growing 0.5% in November against consensus estimates of a 1.1% contraction.
“This is the first positive print for China exports after remaining in negative growth for six consecutive months.
“Overall, we believe the foreign exchange markets are still anxious about the direction of US monetary policy as we approach the final FOMC meeting for the year.
“That can explain why the US dollar-ringgit rate continues to linger slightly above its immediate support level of RM4.6611,” he said.
At 6pm, the ringgit decreased to 4.6720/4.6765 against the greenback from yesterday’s close of 4.6665/4.6700.
At the close, the ringgit was traded mostly lower versus a basket of major currencies.
It was lower against the British pound at 5.8802/5.8858 from 5.8793/5.8837 at yesterday’s close and fell against the Japanese yen to 3.2243/3.2276 from 3.1672/3.1700 previously.
However, the local currency was almost flat vis-a-vis the euro to 5.0359/5.0408 from 5.0356/5.0394 yesterday.
Meanwhile, the ringgit traded mostly lower against other Asean currencies.
It was lower versus the Philippine peso at 8.45/8.46 from 8.44/8.45 yesterday, eased against the Thai baht to 13.2803/13.3014 from 13.2714/13.2908, and fell versus the Singapore dollar to 3.4884/3.4920 from 3.4801/3.4830 yesterday.
The ringgit was flat against the Indonesian rupiah at 301.0/301.5 from 301.1/301.5 previously.