KUALA LUMPUR, March 30 — The ringgit eased today as market players shifted towards safe-haven assets amid uncertainties surrounding the ongoing conflict in West Asia, now stretching beyond a month.
At 8 am, the local currency slipped to 4.0125/4.0305 against the US dollar, from last Friday’s close of 4.0105/4.0140.
Chief economist at Bank Muamalat Malaysia Berhad, Mohd Afzanizam Abdul Rashid, said the foreign exchange market is likely to remain in risk-off mode as uncertainties over the impact of the US–Iran conflict continue to weigh on sentiment.
He noted that the US Dollar Index (DXY) rose to around 100.328 points, indicating that traders and investors are seeking refuge in the US dollar. At the same time, global bond fund managers such as PIMCO and JPMorgan have warned that bond prices could rally as the conflict may slow economic growth.
“Central banks could be forced to cut interest rates based on this outlook. As such, the ringgit is likely to remain above the RM4.00 level amid ongoing risk aversion,” he told Bernama.
Mohd Afzanizam said markets will also be watching United States labour market data, particularly the Nonfarm Payrolls (NFP) report due on Friday.
February’s NFP data showed a contraction of 92,000 jobs, with consensus estimates pointing to 56,000 jobs to be added in the upcoming release. He said signs of a softening US labour market are becoming more evident.
“This is especially true as petrol prices have risen significantly following the conflict in Iran, dampening business and consumer sentiment.
“Ultimately, traders and investors are looking for signs of how the conflict will impact the economy and influence future decisions by the Federal Open Market Committee,” he added.
Meanwhile, the ringgit strengthened against the British pound to 5.3101/5.3340 from 5.3368/5.3414 at last Friday’s close. It also appreciated against the euro to 4.6108/4.6314 from 4.6197/4.6237, and rose versus the Japanese yen to 2.5044/2.5158 from 2.5084/2.5109.
Against ASEAN currencies, the ringgit strengthened against the Singapore dollar to 3.1100/3.1244 from 3.1164/3.1194 previously, and gained against the Thai baht to 12.1624/12.2255 from 12.1903/12.2077. It edged lower against the Indonesian rupiah to 236.3/237.4 from 236.1/236.5, and was unchanged against the Philippine peso at 6.62/6.66.
