KUALA LUMPUR, Jan 11 — The ringgit is expected to be traded in a cautious mode next week along with other emerging currencies, driven by several market-mover events, including the expected signing of US-China phase one trade deal, dealers said.
FXTM market analyst Han Tan said the US dollar is expected to hold its firm position next week driven by expectations of better December non-farm payrolls (NFP) release.
“The US Dollar Index (DXY) has now climbed one per cent so far in 2020, trading back above 97.4 in the lead-up to the December NFP release. Markets are currently pricing in an NFP print of 160,000, and such a figure would underscore the job market’s resilience as US consumers are being relied on to maintain the growth momentum in the world’s largest economy.
“Positive surprises in the headline NFP, wage growth or average hourly readings could see the Dollar Index closing in on its 200-day moving average of 97.706 and stall its downward trend,” he said in a statement.
However, he said considering that the DXY has been posting lower lows since October, the US dollar is expected to moderate further, as long as risk-on sentiment remains uninterrupted and the US Federal Reserve stands pat on US interest rates.
Last Friday, Washington conducted an air strike at Baghdad International Airport, killing the key Iranian military commander, Qasem Soleimani.
Following the strike, Iran responded with “multiple missile attacks” against US bases in Iraq late on Tuesday.
Back home, Prime Minister Tun Dr Mahathir Mohamad’s comments on the current economy are expected to provide some cushion to the local currency moving forward.
In his blog entry entitled “Kerajaan Pakatan Harapan” yesterday, he said Malaysia’s economy is still growing at a good rate at this stage of development with various programmes well underway to further boost it.
“The fact is that the Malaysian economy and its currency are strong. The market and the detractors may not think so. But the Government has faith in its financial and economic policies. And so do foreign and local investors,” he said.
For the week just ended, the ringgit ended higher against the US dollar at 4.0750/0780 compared with last Friday’s 4.1005/1035.
Vis-a-vis other major currencies, the ringgit ended higher against the Singapore dollar at 3.0194/0219 compared with 3.0363/0401 last week, improved versus the British pound to 5.3244/3299 from 5.3577/3637 and strengthened against the euro to 4.5216/5254 from 4.5675/5717 last week.
Meanwhile, the local unit appreciated against the Japanese yen to 3.7160/7198 from 3.7936/7974 last Friday. — Bernama
