Kuala lumpur: The ringgit and other regional currencies are forecasted to experience pressure in the upcoming week, with the local currency anticipated to trade between RM4.04 and RM4.06 against the US dollar. This follows the release of stronger-than-expected US non-farm payrolls (NFP) data, which increased the likelihood of a US interest rate hike, thus strengthening the greenback.
According to BERNAMA News Agency, market focus will remain on forthcoming US economic data, particularly the Consumer Price Index (CPI) report scheduled for next Friday. This report is considered a crucial factor in determining the US Federal Reserve's next interest rate decision. Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, highlighted the significance of the US CPI as Federal Open Market Committee (FOMC) members prepare to deliberate on the Fed Funds Rate, which is currently set between 3.50 and 3.75 percent. He noted that the robust NFP results from August suggest an impending benchmark interest rate increase at the FOMC meeting on September 15 and 16.
The NFP figures for August reached 162,000, significantly surpassing the consensus forecast of 55,000. In the preceding week, Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) opted to maintain the Overnight Policy Rate (OPR) at 2.75 percent during its Thursday meeting. The MPC asserted that the current OPR level aligns with the outlook for sustained price stability and economic growth, while remaining vigilant to ongoing developments and assessing the balance of risks related to domestic inflation and growth.
Over the past week, the ringgit weakened against the greenback, closing at 4.0425/0465 compared to 4.0230/0270 the previous week. The local currency also traded lower against major currencies, depreciating against the British pound, Japanese yen, and euro. Within ASEAN currencies, the ringgit showed mixed performance, strengthening against the Philippine peso but weakening against the Singapore dollar, Indonesian rupiah, and Thai baht.