Ringgit flat in early trade

KUALA LUMPUR: The ringgit took a breather in the early trade on Monday after three days of gains, but is set to be well-supported by rising expectations of a rate cut by the United States (US) later this year.

At 9 am, the local unit remained unchanged at 4.6815/6845 against the U.S. dollar from last Friday’s 4.6815/6855.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects the ringgit to get a boost as the US Federal Reserve (Fed) is committed to easing its monetary policy at some point this year after recent data revealed a softening US labour market.

The US January 2024 and December 2023 non-farm payrolls (NFP) were revised sharply lower by 124,000 and 43,000, respectively.

“Meanwhile, the labour force participation rate has remained steady at 62.5 per cent for three consecutive months and the unemployment rate has risen to 3.9 per cent from 3.7 per cent in the previous three successive months.

“In that sense, the US labour market is cooling and the Fed should be on track to cut the Fund Rate in the second half of the year,” he told BK.

Back home, Bank Negara Malaysia’s firm stance on ringgit undervaluation should also help to steer the ringgit appreciation, as such, the MYR/USD pair should linger around RM4.67 to RM4.68 today, said Mohd Afzanizam.

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

The local currency eased against the British pound to 6.0190/0229 from 6.0050/0101 on Friday, slipped vis-a-vis the Japanese yen to 3.1897/1919 from 3.1821/1850 last week and depreciated versus the euro to 5.1225/1258 from 5.1188/1231 previously.

At the same time, the local note traded mixed against other Asian currencies.

It had depreciated against the Singapore dollar to 3.5178/5203 from Friday’s close of 3.5160/5192 and lower versus the Thai baht at 13.2208/2342 versus 13.2134/2321 last week.

It was unchanged vis-a-vis the Indonesian rupiah at 300.2/300.6 as well as against the Philippines’ peso at 8.42/8.44. – BK