After appreciating marginally around the 4.63 level against the USD on October 5, ahead of the tabling of Budget 2023, the
ringgit weakened to 4.65 on Friday’s closing as the USD index rebounded to above the 112.0 level due to the expectation of a strong US jobs report. Furthermore, the local note was also pressured by a lack of demand for risk assets amid global inflationary concerns, UK’s fragile bond market, and a debilitating EU recession.
Diminishing Fed-pivot speculation due to a stronger-than-expected US Jobs report, a potential rise in US core inflation
reading in September (consensus: 6.5% YoY; Aug: 6.3%), and expectation of more hawkish FOMC minutes, may push the
DXY to trade around the 113.0-115.0 level. This, coupled with increasing domestic political risk after the dissolution of
parliament is expected to push the ringgit closer to the 4.70 level points Kenanga in its weekly ringgit outlook.
The research house also said the USDMYR pair may see some downward momentum this week and move towards the (S1) 4.637 level if US inflation shows signs of cooling down. Conversely, an ascent above the (R1) 4.657 level is needed to confirm USD extended bullish bias.
