KUALA LUMPUR: Trading on the ringgit is expected to remain cautious next week, with all eyes on major data points such as the US nonfarm payroll (NFP) data which will be critical for ringgit-US dollar performance.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the trading of the ringgit would be tentative next week.
"Should the NFP turn out to be better than expected, the ringgit could stay weak next week, possibly around RM4.65 which is quite near its immediate resistant level of RM4.6611," he told Bernama.
Meanwhile, SPI Asset Management managing director Stephen Innes said economists anticipate around 170,000 jobs to be added.
A too-strong report could be a setback for the local currency as it would dispel near-term rate cut expectations for the second half of 2024.
Conversely, he said if the report aligns with or falls slightly short of expectations, it may reinforce beliefs in an imminent rate cut, potentially sparking a rally in the ringgit.
"Asian foreign exchange markets are trading off the backfoot as US rate cut expectations get reeled in.
"The NFP could trigger a substantial recovery rally on gold and the local currency unit. So next week, the cross-asset view will ultimately be dictated by the US jobs data," he said.
For the week just ended, the local note was traded lower on the expectation that higher-for-longer interest rate narratives are likely to persist.
On a Friday-to-Friday basis, the ringgit was weaker against the US dollar at 4.6525/6580 from 4.5900/5980 a week earlier.
The local unit also traded mostly lower against other major currencies.
It rose vis-a-vis the Japanese yen to 3.2038/2078 from 3.2356/2415 a week earlier, but declined against the British pound to 5.8891/8961 from 5.8321/8422 and depreciated versus the euro to 5.0763/0823 from 5.0729/0817 at the previous Friday's close.
The ringgit was also traded lower against a few Asean currencies.
It slipped versus the Singapore dollar to 3.4944/4988 from 3.4746/4812 a week ago and fell against the Thai baht to 13.4001/4236 from 13.3422/3760 previously.
The ringgit was lower against the Indonesian rupiah at 299.8/300.3 from 298.1/298.6 on Friday last week and depreciated against the Philippine peso to 8.37/8.38 from last week's closing rate of 8.28/8.31.