The ringgit opened slightly weaker against the US dollar on Friday morning, but outperformed several other major world currencies amid a still cautious currency market.
At 10.23am, the ringgit was at RM4.0310, down 0.52% since it opened early Friday in Asian trading.
Market sentiment is currently influenced by the actions of authorities in several Asian countries who issued statements to reaffirm their commitment to stabilizing their respective currencies amid global economic uncertainty.
The pressure on the ringgit against the US dollar occurred as investors await the release of US employment data or Nonfarm Payroll (NFP) which is scheduled to be released tonight.
The data is considered important as it provides a picture of the strength of the US labor market and could influence the direction of the country's central bank's monetary policy.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the market forecast is for the number of new jobs in the US for May to increase by 85,000 compared to 115,000 in April, while the unemployment rate is expected to remain at 4.3 per cent.
According to him, this data will be the main factor determining the direction of the market as rising fuel prices have the potential to increase inflation, while the still stable labour market conditions could cause the US Federal Reserve (Fed) to maintain a tight monetary policy stance for longer.
He also explained that the US dollar and Japanese yen currency pair has surpassed the psychological level of 160 yen, thus prompting the Japanese government to express its willingness to intervene in the foreign exchange market to support the value of its currency.
In addition, India is also considering abolishing capital gains tax on bonds in an effort to attract more foreign investors.
This development has made regional currency markets more cautious, including against the ringgit, especially when political factors such as state elections are also of concern to investors.
In terms of performance against major currencies, the ringgit strengthened against the British pound to 5.3845/3899 from 5.3872/3932 at Thursday's close.
The ringgit also strengthened against the euro to 4.6587/6634 from 4.6610/6663 previously and rose against the Japanese yen to 2.5075/5102 from 2.5081/5111.
However, the ringgit's performance against regional currencies was more mixed.
The ringgit strengthened slightly against the Singapore dollar to 3.1224/1258 from 3.1241/1279 at the previous close.
However, the local currency depreciated against the Thai baht to 12.2710/2881 from 12.2708/2903, declined against the Philippine peso to 6.51/6.52 from 6.50/6.52, and also weakened slightly against the Indonesian rupiah to 222.2/222.6 from 222.1/222.4 previously.
