KUALA LUMPUR: The ringgit opened lower against the US dollar in early trade as the greenback strengthened, supported by improvements in the US labour market and a robust economy, an analyst said.
At 8am, the ringgit traded at 4.5100/5185 against the US dollar compared with 4.4945/5000 at Friday’s close.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US labour market remains resilient, with the latest non-farm payroll data exceeding expectations. December saw 256,000 jobs added, surpassing the consensus estimate of 160,000.
“The combination of policy uncertainties under Trump 2.0 and a strong US economy suggests high demand for the US dollar.
“The positive outturn gives the impression that the US Federal Reserve (Fed) is not about to lose its grip on monetary policy, making the case for further interest rate cuts increasingly challenging,” he told Bernama.
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He added that the US Dollar Index (DXY) is currently hovering at an elevated level of around 109.706 points.
“This is the highest level since September 2022, a period when the Fed was actively raising interest rates.
“As such, the ringgit is likely to remain weak in the near term,” he added.
Meanwhile, the ringgit opened mixed against major currencies.
It eased against the Japanese yen to 2.8557/8614 from Friday’s close of 2.8461/8497 but advanced against the British pound to 5.5040/5144 from 5.5296/5364. It also rose vis-a-vis the euro to 4.6200/6288 from 4.6298/6355 previously.
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However, the ringgit traded lower against ASEAN currencies.
It declined versus the Thai baht to 12.9960/13.0461 from 12.9824/13.0043 at Friday’s close and inched lower vis-a-vis the Indonesian rupiah to 278.5/279.2 from 277.5/278.0.
The ringgit also depreciated against the Singapore dollar to 3.2881/2948 from 3.2843/2888 previously and weakened versus the Philippine peso to 7.72/7.74 from 7.70/7.71 at Friday’s close.
