KUALA LUMPUR: The ringgit continued its downward momentum from last week to open marginally lower against the US dollar today as investors reacted on the positive US jobs data released last week, an analyst said.
At 9.01 am, the local currency fell slightly to 4.4860/4900 against the greenback from Friday’s close of 4.4855/4870.
However, Kenanga Research said despite the solid US jobs report and market expectations of another 75 basis points (bps) interest rate hike by the US Fedral Reserve (Fed), the local note is expected to trade stronger around the 4.47-4.48 level against the greenback this week.
“The ringgit is seen to benefit from Bank Negara Malaysia’s potential 25 bps overnight policy rate hike and European Central Bank’s widely anticipated 75 bps interest rate hike. However, a potential slowdown in China’s exports may weigh on the yuan, exerting downward pressure on the ringgit,” it said in a note today.
Kenanga Research said the ringgit shed all of its gains against the US dollar last week, mainly due to the lack of pro-ringgit catalysts and deteriorating global economic prospects.
“The USD Index was trading around the 108.7-109.7 level due to the Fed’s Jerome Powell hawkish rhetoric and Europe’s worsening energy crisis.
“On top of the continuation of safe haven flows into the US dollar, the ringgit was dragged down by the persistent weakness in the yuan (around 6.90 per US dollar) as China extended its lockdown in the city of Chengdu,” it added.
Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.
The local unit appreciated against the Singapore dollar to 3.1968/1998 from Friday’s close of 3.1996/2009 and rose against the British pound to 5.1522/1568 from 5.1888/1906.
It slipped against the Japanese yen to 3.1977/2007 from 3.1950/1963 previously but advanced against the euro to 4.4492/4532 from 4.4873/4888 on Friday. – Bernama