Ringgit's movement to be influenced by external factors next week

KUALA LUMPUR: The ringgit's movement next week is expected to be influenced by external factors, especially economic data from the US, dealers said.

FXTM Research Analyst, Lukman Otunuga said key events would be the US jobs report for January, which should offer fresh insights into the health of the US labor market.

"While every detail about the US jobs report is critical, there will be a strong focus on wage growth.

"Any signs of wage growth accelerating could stimulate expectations of rising inflation, ultimately lifting the prospects for further US interest rate increases this year," he said in a statement.

He said with the Federal Reserve expecting inflation to rise this year and a brighter outlook for the economy, the non-farm payroll report would be in sharp focus.

"A scenario where the headline jobs number and wage growth both dish out upside surprises may offer the US dollar some support," he said.

During the week-just-ended, the ringgit started the week lower against the US dollar ahead of the US Federal Open Market Committee meeting and two consecutive days of local holidays – the Thaipusam celebration and Federal Territory Day.

The ringgit recovered after the holiday as US central bank decided to retain their interest rate.

On a Friday-to-Friday basis, the local note finished at 3.8850/8880 against the greenback from 3.8690/8720 in the previous week.

The ringgit was, however, mixed against a basket of major currencies.

It rose against the Singapore dollar to 2.9575/9618 from 2.9607/9648 the previous week and appreciated against the yen to 3.5354/5387 from 3.5456/5490.

The local unit went down against the euro to 4.8508/8553 from 4.8185/8234 and eased against the British pound to 5.5229/5283 from 5.5160/5222. — Bernama