Ringgit inches up as US jobless claims higher than forecast

 

KUALA LUMPUR: The ringgit closed higher against the greenback today as the latest US economic data heightened the expectation that the Federal Reserve (Fed) is done with interest rate hikes, a dealer said.

He added that traders are now speculating that the Fed will start cutting rates soon.

ActivTrades trader Dyogenes Rodrigues said the US dollar sentiment remained downbeat following the US initial jobless claims data, which was higher than expected at 231,000 against the 220,000 forecast.

“The higher-than-expected reading shows that more people have lost their jobs and that tends to negatively impact the greenback.

“From a technical point of view, as the USD/MYR has managed to break below 4.7000, it is possible that it could fall to the 4.6350 region in a few days’ time,” he said.

SPI Asset Management managing director Stephen Innes said with Malaysia being a commodity exporter, energy prices remained the biggest drag on the ringgit.

“We think some late-cycle of US economics is starting to enter the picture. The US data is starting to soften very quickly, which is somewhat of a concern for commodity exporters, especially with growth concerns in China and Europe.

“But the US dollar has entered a consolidative phase with the market (speculating on) when the Fed will cut (interest rates). It is a big question for foreign exchange markets right now,” he said.

At the close, the ringgit was traded mostly higher versus a basket of major currencies.

It rose to 4.6785/4.6825 against the greenback from Thursday’s close of 4.6850/4.6910.

The local note increased against the euro to 5.0771/5.0814 from 5.0832/5.0897 at Thursday’s close and improved vis-a-vis the British pound to 5.8056/5.8105 from 5.8103/5.8178 yesterday, but fell against the Japanese yen to 3.1267/3.1296 from 3.0963/3.1005 previously.

It ended lower against other Asean currencies, depreciating against the Singapore dollar to 3.4769/3.4801 from 3.4737/3.4784 on Thursday and decreased vis-a-vis the Indonesian rupiah to 301.9/302.3 from 301.1/301.7 previously.

The ringgit also weakened against the Thai baht to 13.3298/13.3481 from 13.2065/13.2286 yesterday and was flat against the Philippine peso at 8.40/8.41. - FMT