Kuala Lumpur: The ringgit concluded Monday's trading session on a weaker note against the US dollar, reflecting cautious market sentiments spurred by robust United States nonfarm payrolls (NFP) for December 2024. At the close of the day, the ringgit softened to 4.5080/5120 against the greenback, compared to last Friday's finish of 4.4945/5000.
According to BERNAMA News Agency, the US NFP surged to a nine-month peak, adding 256,000 jobs in December, up from 212,000 in November. This increase was attributed to widespread employment growth across most sectors, excluding manufacturing. Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, noted that the strong NFP figures imply that the US Federal Reserve is likely to maintain the current interest rate levels when they meet on January 28-29. "They may want to keep the Fed Fund Rate stable at the prevailing level to contain the risk of higher inflation," he told Bernama.
Meanwhile, Stephen Innes, managing partner at SPI Asset Management, indicated that the ringgit's weakness aligns with the performance of other Asian currencies, largely influenced by last Friday's robust US employment data. This data has led to higher US rates and a "bear steepening" in the bond market, affecting short-dated bonds the most. "This reflects a growing scepticism around the likelihood of Fed rate cuts. This scepticism could deepen if this week's US consumer price index (CPI) comes in hot," he mentioned. Innes further added that a strong CPI could reduce the chances of rate cuts soon, adding pressure on the ringgit. The looming concern of potential tariffs in less than two weeks is also a negative factor.
Despite its decline against the US dollar, the ringgit showed strength against other major currencies. It appreciated against the euro, moving to 4.5964/6004 from 4.6298/6355 last Friday, and strengthened against the British pound to 5.4592/4640 compared to 5.5296/5364 last week. However, the ringgit fell against the Japanese yen, moving to 2.8706/8733 from 2.8461/8497 previously.
The local currency also performed well against ASEAN currencies. It rose against the Thai baht to 12.9440/9618 from 12.9824/13.0043 at the previous close and was higher against the Indonesian rupiah at 276.8/277.2 from 277.5/278.0 last Friday. The ringgit appreciated against the Singapore dollar to 3.2788/2822 compared to 3.2843/2888 last Friday and advanced against the Philippines' peso to 7.68/7.69 from 7.70/7.71.