The Ringgit Is Expected To Remain Weak This Week

<p>The value of the ringgit is forecast to move around RM4.72 to RM4.73 this week with limited decline as the local currency is technically in an 'oversold' position.</p><p><br /></p><p>According to the Chief Economist of Bank Muamalat Malaysia Bhd, Dr Mohd Afzanizam Abdul Rashid said investors will focus on the upcoming US economic data, especially the US Nonfarm Payroll (NFP) in January.</p><p><br /></p><p>The NFP data is expected to drop to 162,000 compared to 216,000 last December.</p><p><br /></p><p>However, the closest data to watch out for now is the Federal Open Market Committee (FOMC) meeting that will be published on Wednesday and investors expect the Fed to maintain its status quo.</p><p><br /></p><p>He also said that the expectation of the first interest rate cut of 2024 in March has decreased from 73.6% to 50.4% for now. It will still give a slight edge to the US dollar currency.</p><p><br /></p><p>The Managing Director of SPI Asset Management, Stephen Innes in his statement added that the post-FOMC press conference on January 31 could have an impact on market expectations regarding the first quarter interest rate cut in March.</p><p><br /></p><p><br /></p><p>Although the market is expecting ups and downs, should there be a significant increase in US-China geopolitical tensions. The ringgit currency may not depreciate significantly from current levels.</p><p><br /></p><p>The release of January's Employment and Consumer Price Index (CPI) report to be published in early February will trigger market volatility. However, significant upward movement in the ringgit is quite impossible until the high-risk report occurs.</p><p><br /></p><p>For now, the local currency is traded quite mixed based on the sentiment of global economic prospects such as China and the United States which are uncertain.</p><p><br /></p><p>Not to forget, last week Bank Negara Malaysia's Monetary Policy Committee maintained the Overnight Policy Rate (OPR) at 3.00 percent and marked the fourth consecutive meeting of the MPC to maintain the rate.</p><p><br /></p><p>Meanwhile, the ringgit was traded weakly compared to major world currencies such as the British pound, the euro and the Japanese yen.</p><p><br /></p><p>It is also trading quite mixed compared to other Asean currencies. The ringgit is low against the Singapore dollar and not significantly against the Thai baht.</p><p><br /></p><p>The local currency strengthened against the Indonesian rupiah and the Philippine peso.</p>