Ringgit Slipped To Danger Level, No Signs Of Strengthening


 The value of the ringgit is seen to continue its plunge to a level above 4.6400 against the US dollar from where it closed yesterday. The market is now placing high hopes on the Federal Reserve (Fed) regarding the expectation to cut interest rates that will give the local currency some breathing room.

US economic data, the newly released Automatic Data Processing (ADP) job change report shows that the labor market in the US remains resilient with a total of 164,000 new jobs created in the private sector in December compared to market expectations of 115,000.

Meanwhile, initial jobless claims fell to 202,000 last week from 220,000 previously. Weak sentiment could dampen market expectations of an interest rate cut by the Fed and see the value of the ringgit continue its decline.

The ringgit started the day by opening at 4.6420/4.6480 against the US dollar, down from yesterday's close of 4.6330/4.6370.

The decline in the value of the ringgit is also due to the increase in the two and 10 year US Treasuries which saw an increase of six to eight basis points to close at 4.38% and 4% respectively.

For now, investors should focus their attention on the NFP Jobs data report and the US Unemployment Rate report at 9.30pm tonight.

Meanwhile, the ringgit traded mostly higher against a group of major currencies. It improved against the British pound to 5.8907/5.8983 from 5.8964/5.9015 yesterday and added value against the Japanese yen to 3.2054/3.2097 from 3.2185/3.2215.

The local unit also eased against the euro to 5.0835/5.0900 from 5.0634/5.0694 yesterday.

The ringgit traded mostly lower against Asean currencies.

It fell against the Singapore dollar to 3.4921/3.4968 from 3.4903/3.4936 at yesterday's close and depreciated against the Philippine peso to 8.36/8.37 from 8.33/8.34.

The local currency was lower against the Indonesian rupiah at 299.6/300.1 from 299.0/299.4, but it rose against the Thai baht at 13.4236/13.4487 from 13.4500/13.4687.