Markets are positioned for softer US non-farm payrolls, weighing on the US dollar and supporting regional currencies, says analyst.
IPPFA Sdn Bhd director of investment strategy and country economist Sedek Jantan said expectations for the NFP data were increasingly skewed towards a softer reading that could weigh on the dollar.
“The move is broadly consistent with regional trends, as the Bloomberg Asia Dollar Index edged higher, signalling a wider recalibration in favour of Asian currencies as investors begin to question the resilience of the US labour market.
“This creates room for further ringgit appreciation, as any downside surprise in the NFP would likely prompt a modest repricing of Federal Reserve expectations, easing yield support for the dollar,” he added.
However, he said that while the near-term bias favoured ringgit strength, the broader macro backdrop remained supportive of the dollar, with ongoing US-Iran tensions reinforcing safe-haven demand for dollar liquidity.
Meanwhile, the ringgit opened higher against a basket of major currencies.
It strengthened against the British pound to 5.3158/5.3423 from 5.3278/5.3364 at yesterday’s close, rose versus the Japanese yen to 2.5191/2.5318 from 2.5295/2.5337, and gained against the euro to 4.6372/4.6603 from 4.6517/4.6592.
The local currency also traded higher against Asean peers.
It edged up against the Singapore dollar to 3.1254/3.1422 from 3.1364/3.1417 at yesterday’s close, and improved against the Philippine peso to 6.63/6.67 from 6.66/6.68.
The ringgit rose versus the Indonesian rupiah to 236.3/237.6 from 237.4/237.9, and was slightly higher against the Thai baht at 12.3161/12.3930 from 12.3180/12.3447 previously. - FMT
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