Kuala Lumpur: The ringgit took a breather in the early trade on Monday after three days of gains, but is set to be well-supported by rising expectations of a rate cut by the US later this year.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid expects the ringgit to get a boost as the US Federal Reserve (Fed) is committed to easing its monetary policy at some point this year after recent data revealed a softening US labour market.
The US January 2024 and December 2023 non-farm payrolls (NFP) were revised sharply lower by 124,000 and 43,000, respectively.
“Meanwhile, the labour force participation rate has remained steady at 62.5% for three consecutive months and the unemployment rate has risen to 3.9% from 3.7% in the previous three successive months.
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Back home, Bank Negara Malaysia’s firm stance on ringgit undervaluation should also help to steer the ringgit appreciation, as such, the MYR/USD pair should linger around RM4.67 to RM4.68 today, Afzanizam noted.
At 9am, the local unit remained unchanged at 4.6815/4.6845 against the US dollar from last Friday’s 4.6815/4.6855.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
The local currency eased against the British pound to 6.0190/6.0229 from 6.0050/6.0101 on Friday, slipped vis-a-vis the Japanese yen to 3.1897/3.1919 from 3.1821/3.1850 and depreciated versus the euro to 5.1225/5.1258 from 5.1188/5.1231 last week.
At the same time, the local note traded mixed against other Asian currencies.
It had depreciated against the Singapore dollar to 3.5178/3.5203 from Friday’s close of 3.5160/3.5192 and lower versus the Thai baht at 13.2208/13.2342 versus 13.2134/13.2321 last week.
It was unchanged vis-a-vis the Indonesian rupiah at 300.2/300.6 as well as against the Philippines’ peso at 8.42/8.44.
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