The ringgit opened higher against the US dollar on Friday morning, driven by market expectations that the US non-farm payrolls (NFP) data would be lower, thus putting pressure on the dollar and supporting Asian currencies.
At 10:47am, the ringgit was trading at 4.0320, up 0.10% against the US dollar since opening early Friday in Asian trading.
IPPFA Sdn Bhd Investment Strategy Director Sedek Jantan said investors were now inclined to expect a lower NFP reading, which could weaken the dollar and open room for strengthening for the ringgit.
The move was in line with regional trends, with the Bloomberg Asia Dollar Index showing a recalibration that supported Asian currencies as investors began to question the resilience of the US labour market.
He also said any surprise in the NFP data was expected to prompt a modest adjustment in Federal Reserve expectations, thus reducing support for the dollar.
However, Sedek added that while the strengthening of the ringgit is expected to occur in the short term, macro factors such as the ongoing tension between the US and Iran continue to support demand for safe-haven assets including the dollar.
Apart from the US dollar, the ringgit also strengthened against other major currencies.
It rose against the pound to 5.3158/3423, the Japanese yen to 2.5191/5318, and the euro to 4.6372/6603.
Local currencies also recorded gains against ASEAN currencies, including the Singapore dollar (3.1254/1422), the Philippine peso (6.63/6.67), the Indonesian rupiah (236.3/237.6), and the Thai baht (12.3161/3930).
