Kuala lumpur: The ringgit weakened against the US dollar on Friday, as the greenback gained traction following the release of stronger United States economic data. At 8.05 am, the local currency depreciated to 4.2200/2300 against the US dollar from Thursday's close at 4.2085/2120.
According to BERNAMA News Agency, Stephen Innes, managing director of SPI Asset Management, highlighted that a notable decline in US weekly jobless claims to the lowest level since 2022 contributed to alleviating concerns over a significant downturn in the labor market. The positive sentiment was further bolstered by a stronger-than-expected revision to the second-quarter gross domestic product (GDP), marking the fastest growth rate in nearly two years.
Innes pointed out that these developments dispelled fears that President Donald Trump's trade and tariff policies might disrupt the US economy, instead reinforcing the notion that the country remains on solid ground. "Against this backdrop, the ringgit will likely encounter renewed selling pressure, with sentiment towards broader emerging markets remaining defensive until there's more clarity on US inflation and Federal Reserve policy moving into October," said Innes.
Meanwhile, Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, anticipates the ringgit to trade within a narrow range of RM4.21 to RM4.22 for the day. He noted the continued strengthening of the US Dollar Index (DXY), with final estimates for the second-quarter US GDP revised upwards to 3.8 percent from the previous estimate of 3.3 percent.
At the market opening, the ringgit showed strength against a basket of major currencies. It climbed to 2.8146/8215 against the Japanese yen from 2.8283/8308 at Thursday's close, edged up to 4.9197/9313 against the euro from 4.9429/9470, and improved to 5.6257/6390 against the British pound from 5.6600/6647.
The local currency exhibited mixed performance against ASEAN currencies. It advanced to 3.2589/2669 against the Singapore dollar from 3.2662/2692, and appreciated to 13.0897/1285 against the Thai baht from 13.0959/1133. Conversely, it slid against the Philippine peso to 7.26/7.28 from the previous day's close of 7.24/7.25, and remained relatively unchanged at 251.9/252.6 against the Indonesian rupiah from 251.2/251.5.