Ringgit continues to record gains for 11 consecutive days

KUALA LUMPUR: The ringgit continues to receive strong support, maintaining its upward momentum for 11 consecutive days against the US dollar as investors shift their investments to the Asia-Pacific region following weak employment data from the United States last Friday, analysts said.

According to Bernama, at 8 AM, the ringgit rose to 4.4930/5010 against the US dollar, up from 4.4945/4995 last Friday.

Reports indicated that the US unemployment rate surged to its highest level in nearly three years at 4.3 percent in July, compared to 4.1 percent in June.

UOB’s Head of Investment Research, Kay Hian Wealth Advisors, Mohd Sedek Jantan, stated that in the wake of the weak US employment data, US bond yields fell significantly as investors sought safety in fixed income.

As a result, the yield on the two-year Treasury note dropped sharply from 4.39 percent to 3.91 percent, marking its lowest level since March 2023 and causing the US dollar index (DXY) to decline by over one percent in a single day.

“Additionally, the tendency towards loosening monetary policy by the Bank of England and the Federal Reserve last week is expected to sustain the increased demand for the ringgit,” he told Bernama.

Meanwhile, the Chief Economist of Bank Muamalat Malaysia Bhd, Dr. Mohd Afzanizam Abdul Rashid, believes that the ringgit against the US dollar is expected to move towards the current support level at RM4.40.

Therefore, he anticipates that the ringgit against the US dollar will be between RM4.47 and RM4.48 today.

“The US bond market is experiencing positive sentiment, indicating that players anticipate a sharp decline in the Federal Funds Rate,” he said.

Meanwhile, the ringgit traded lower against a basket of major currencies and was mixed against ASEAN currencies.

It declined against the pound to 5.7447/7550 from 5.7264/7328 last Friday, dropped against the euro to 4.9019/9106 from 4.8635/8689 previously, and weakened against the Japanese yen to 3.0848/0913 from 3.0177/0214 last week.

Against ASEAN currencies, the local currency was nearly unchanged against the Indonesian rupiah at 277.3/277.9 from 277.4/277.8 and flat against the Philippine peso at 7.73/7.57.

It fell against the Singapore dollar to 3.3889/3952 from 3.3750/3793 and weakened against the Thai baht to 12.7158/7503 from 12.7093/7284 previously.