Ringgit closes weaker as the greenback stayed resilient

 

KUALA LUMPUR: The ringgit closed weaker against the US dollar as the greenback stayed resilient, increasing its appeal as a safe-haven currency on escalating geopolitical tensions, the Federal Reserve (Fed)’s hawkish remark as well as positive US economic data, an economist said.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US dollar gained further traction today as nonfarm payrolls (NFP) data for January showed that the US economy has been remarkably resilient.

He said the NFP came in higher than expected at 353,000, which was much higher than the consensus estimates of 185,000.

“The impression from the NFP outturn indicates that the Fed might want to keep the rates higher for longer which would translate into further support for the US dollar.

“Inadvertently, emerging market currencies including the ringgit will be negatively affected,” he told Bernama.

He pointed out that at this juncture, the uncertainties over US monetary policy will continue to hog the limelight in the currency market as it appears that the market expectation of a rate cut in March has been quite premature.

“Such a setback would only give more strength to the US dollar. As such, the ringgit is likely to remain in a narrow range although further downside looks limited given that it has been hovering at an oversold position,” he added.

At 6pm, the ringgit fell to 4.7460/4.7520 against the greenback from last Friday’s closing rate of 4.7155/4.7185.

Meanwhile, the ringgit traded higher against a basket of major currencies.

It rose vis-a-vis the Japanese yen to 3.1957/3.2000 from 3.2142/3.2164 at last Friday’s close, appreciated against the British pound to 5.9804/5.9880 from 6.0160/6.0199 previously and advanced versus the euro to 5.1038/5.1103 from 5.1352/5.1384.

The local currency traded mixed versus Asean currencies.

The ringgit improved against the Singapore dollar to 3.5260/3.5307 versus 3.5309/3.5334 last Friday and rose versus the Thai baht to 13.2559/13.2782 from 13.3735/13.3873.

However, it was lower against the Indonesian rupiah at 302.1/302.6 compared to 301/301.4 on Friday and was unchanged versus the Philippine peso at 8.43/8.45. -FMT