Ringgit Value Is Weak, FOMC Report Gives True Answer

<p>&nbsp;This morning, the Malaysian Ringgit (RM) currency weakened again against the US dollar after hopes of a cut in interest rates next March by the Fed faded. The US Federal Open Market Committee (FOMC) report provided little answer about the extent of the cuts.</p><p><br /></p><p>Exactly at 9 this morning, the ringgit was seen weakening at 4.6400 compared to the US dollar compared to closing last night at 4.6300.</p><p><br /></p><p>According to the Chief Economist of Bank Muamalat Malaysia, Mohd Afzanizam, the data shows that the time is right to reduce the profit rate in the US considering that the latest inflation forecast is expected to come into effect at the end of 2024.</p><p><br /></p><p>This has given it greater strength in the market for longer narratives. Apart from that, he also believes that the value of the ringgit currency will continue to weaken in the near future, around the level of RM4.63 to RM4.65.</p><p><br /></p><p><br /></p><p>He said again, the ADP employment change report will continue to be closely monitored if the market looks for direction to strengthen the US labor report again. The consensus budget had shown 125,000 jobs created in the private sector in December versus 103,000 in the previous month.</p><p><br /></p><p>This Friday, the most expected statistics namely NFP employment data will be released with the consensus estimate decreasing to 171,000 in December versus 199,000 in November.</p><p><br /></p><p>Afzanizam stated that stronger than expected output would increase the value of the US dollar.</p><p><br /></p><p>Meanwhile, the ringgit is trading weak compared to several major world currencies. It is also weak against the British pound and euro but stronger against the Japanese yen.</p><p><br /></p><p>The local currency is also seen as somewhat mixed compared to some Asean currencies. It fell slightly compared to the Singapore dollar and Indonesian rupiah. Meanwhile, it is traded higher than the Philippine peso and Thai baht.</p>