KUALA LUMPUR – The ringgit is expected to experience some technical correction in the coming days, trading in the range of 4.40 to 4.41 against the US dollar, an economist said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit is already at an overbought position from the technical chart, implying that some correction is quite likely in the near term.
In the meantime, the US Non-Farm Payroll (NFP) employment report is expected to show a lower reading, suggesting that America’s Federal Reserve (Fed) will pause any decision on an interest rate hike at the next Federal Open Market Committee meeting on May 2 and 3.
“However, should the NFP report be higher than what the market expected, there is a tendency for the US dollar to get stronger as the Fed will likely continue to deliver a 25-basis-point hike in May.
“The same could also be true if the NFP is lower than anticipated. The risk-off mode would seep in as fear of recession in the US starts to loom again,” he said.
Afzanizam said because of the flight to safety, the US dollar could appreciate.
On a week-on-week basis, the local note was traded higher against the greenback yesterday at 4.3995/4035 against the previous Friday’s close of 4.4130/4175.
Meanwhile, the local note traded yesterday mostly lower against a basket of major currencies compared to a week earlier.
It weakened against the British pound at 5.4730/4780 from 5.4580/4636 a week earlier and dropped vis-a-vis the Japanese yen to 3.3411/3443 from 3.3083/3122, but rose against the euro to 4.8016/8060 from 4.8036/8084.
Meanwhile, the ringgit traded mixed against its Asean counterparts.
The local note was higher versus the Singapore dollar at 3.3079/3114 from 3.3185/3224 in the previous week and increased vis-a-vis the Philippine peso to 8.08/8.09 from 8.12/8.13 previously.
It, however, depreciated against the Indonesian rupiah to 295.00/295.30 from 294.20/294.70 and fell against the Thai baht to 12.9090/9279 from 12.9031/9220 previously. – Bernama, April 8, 2023
