KUALA LUMPUR: The weakening of the ringgit to an almost nine-year low in the early session Monday is not unusual, in the context of the strengthening of the greenback.
As at 10.20 am, the local currency stood at 3.7570/7600 against the US dollar as compared to the 3.7170/7200 recorded at last Friday’s close.
Inter-Pacific Securities’ Head of Research Pong Teng Siew said the US dollar was continuing its upward momentum from last week after having posted strong jobs data on Friday.
“The greenback not only strengthened against the ringgit, but almost all other currencies.
“The positive jobs data and strong US economy is indication that the US Federal Reserve (Fed) is looking at raising interest rates before year-end,” he told Bernama.
While the issues surrounding 1Malaysia Development Bhd(1MDB) may have a slight impact on the local unit’s movement, Pong said the strengthening of the greenback is the main cause behind the ringgit’s slump.
The US non-farm payrolls data jumped to 280,000 last month, the largest gain since December, while that for March and April was revised to show 32,000 more jobs were created than previously reported.
A survey by Wall Street’s top banks showed that the Fed would raise interest rates twice this year, first in September, followed by another before year-end.- Bernama