The ringgit started the session on a stronger footing on Friday as weaker-than-expected US labour data reinforced expectations that the Federal Reserve may take a more cautious stance on interest rates, Bernama reported.
At 8.04am, the local note strengthened to 4.0705/0805 against the US dollar, compared with Thursday’s close of 4.0780/0830.
The move came after fresh US data showed signs of cooling in the labour market, with nonfarm payrolls rising by just 57,000 in June, significantly below market expectations of around 114,000.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the softer figures, along with downward revisions for April and May, suggest the US labour market may not be strong enough to support an immediate rate hike by the Fed.
“From a technical analysis perspective, the ringgit against the US dollar is already in oversold territory. This suggests the ringgit could appreciate further against the US dollar in the near term.
“Yesterday, the ringgit closed 0.33 per cent higher against the US dollar at RM4.0805. As such, we expect the US dollar/ringgit to hover between RM4.06 and RM4.07 today,” he told Bernama.
The local currency also opened higher against a basket of major currencies.
It strengthened against the British pound to 5.4296/4430 from 5.4401/4467 at Thursday’s close, rose against the Japanese yen to 2.5214/5277 from 2.5295/5327 and edged up against the euro to 4.6497/6612 from 4.6526/6583.
Against regional peers, the ringgit also traded firmer across the board.
It appreciated against the Philippine peso, Indonesian rupiah, Thai baht and Singapore dollar, reflecting broad-based support for the local currency in early trade.
Overall sentiment remained supported by expectations that softer US economic data could ease pressure on global currencies and temper the dollar’s recent strength.
