KUALA LUMPUR, Sept 5 — The ringgit and other regional currencies are expected to come under pressure next week, with the local currency seen trading between RM4.04 and RM4.06 against the US dollar.

This comes after the stronger-than-expected US non-farm payrolls (NFP) data released overnight increased the chances of a US interest rate hike, bolstering the greenback.

Market attention will continue to centre on upcoming US economic data, particularly the Consumer Price Index (CPI) report next Friday, which is widely seen as a key determinant of the US Federal Reserve’s next interest rate decision.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US CPI will be a critical data point as the Federal Open Market Committee (FOMC) members reconvene the following week to deliberate on the Fed Funds Rate, which currently stands at 3.50 to 3.75 per cent.

“The strong NFP outturn during August suggests that the Fed is likely to raise its benchmark interest rate in the upcoming FOMC meeting on Sept 15 and Sept 16,” he told Bernama.

The NFP came in at 162,000 in August, well above the consensus forecast of 55,000.

For the week just ended, Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) decided to maintain the Overnight Policy Rate (OPR) at 2.75 per cent at its meeting on Thursday.

The MPC said that the current OPR level was consistent with the outlook for continued price stability and sustainable economic growth.

The committee said it will remain vigilant to ongoing developments and assess the balance of risks surrounding the outlook for domestic inflation and growth.

Meanwhile, on a Friday-to-Friday basis, the ringgit weakened against the greenback to 4.0425/0465 from 4.0230/0270 a week earlier.

The local currency was traded weaker against a basket of major currencies during the week.

The ringgit depreciated against the British pound to 5.4663/4717 from 5.4632/4687 last Friday, fell against the Japanese yen to 2.5832/5860 from 2.5193/5219, and declined against the euro to 4.6962/7008 from 4.6828/6874.

The ringgit traded mostly lower against Asean currencies.

The local note strengthened against the Philippine peso to 6.46/6.47 from 6.54/6.55 a week earlier, but weakened against the Singapore dollar to 3.1888/1923 from 3.1652/1686 previously.

It declined against the Indonesian rupiah to 229.1/229.4 from 227.3/227.7, and fell further against the Thai baht to 12.2693/2863 from 12.2087/2253 last Friday. — Bernama