KUALA LUMPUR: The ringgit staged a rebound this morning, opening higher against the US dollar as the greenback slipped on unexpected data print, an economist said.
At 9 am, the local note rose to 4.6030/6100 versus the greenback compared with yesterday’s closing of 4.6185/6235.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the United States (US) Initial Jobless Claims rose to 261,000 last week – higher than the consensus estimates of 235,000, which led to the devaluation of the US dollar.
“The latest print also revealed the possibility of a pause in the rate hike cycle during next week’s Federal Open Market Committee meeting.
“As such, we shall expect the ringgit to stage a slight appreciation today,” he told Bernama.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
It fell to 3.3103/3156 against the Japanese yen from yesterday’s closing of 3.3041/3079, slipped vis-a-vis the euro to 4.9630/9705 from Thursday’s 4.9557/9610 and depreciated versus the British pound to 5.7786/7874 from 5.7537/7600 previously.
Conversely, the local note was traded mostly higher against other Asean currencies.
The ringgit improved against the Singapore dollar to 3.4271/4326 from 3.4290/4332 on Thursday, strengthened against the Indonesian rupiah to 308.9/309.6 from 310.0/310.5 yesterday, and rose against the Philippines’ peso at 8.22/8.24 from 8.23/8.24 previously.
However, the local currency declined versus the Thai baht to 13.2992/3245 from 13.2647/2848 yesterday.
US dollar dives
In New York, the US dollar suffered substantial losses on Thursday as American jobless claims last week jumped more than expected to the highest level since 2021, reported Xinhua.
The dollar index, which measures the greenback against six major peers, sank 0.71 per cent to 103.3473 in late trading.
Data released Thursday by the US Department of Labour shows that initial jobless claims for the week ending June 3 surged by 28,000 to 261,000, well above the 2019 pre-pandemic average of 218,000. It marks the highest level of jobless claims since October 2021.
“The sustained increase in weekly jobless claims from last year’s cyclical low is meaningful, clearly illustrating a softening in conditions,” said Jim Baird, chief investment officer with Plante Moran Financial Advisors.
“That’s encouraging news for Fed policymakers who have been looking for evidence that the aggressive rate hikes of the past year are having an impact,” Baird added.
While not considered a major indicator on a weekly basis in the Fed’s decision-making, this week’s jobless claims will be one of the final economic data points for the Federal Reserve ahead of the Federal Open Market Committee (FOMC) meeting set to begin next Tuesday.
As of Thursday afternoon, markets are pricing in a 71 per cent chance that the Fed pauses its historic interest rate hiking campaign at that meeting, per the CME FedWatch Tool.
Meanwhile, the US Treasury yields swiftly pulled back with the 2-year briefly dipping below the 4.5 per cent handle.
The week ahead is likely to remain relatively quiet as markets anticipate next week’s US consumer price index and FOMC announcement which is sure to stir up some volatility.
In late New York trading, the euro was up to US$1.0779 from US$1.0703 in the previous session, and the British pound rose to US$1.2555 from US$1.2441 in the previous session.
The US dollar bought 138.9410 Japanese yen, lower than 140.0830 Japanese yen of the previous session. The US dollar was down to 0.8992 Swiss franc from 0.9095 Swiss franc, and it fell to 1.3359 Canadian dollars from 1.3371 Canadian dollars. The US dollar fell to 10.8011 Swedish Krona from 10.8915 Swedish Krona. – BERNAMA-XINHUA
