KUALA LUMPUR (Jan 12): The ringgit extended its uptrend versus the US dollar by opening higher on Thursday morning (Jan 12), as demand for the local note improved, after the just-released November 2022 unemployment data painted a positive economic outlook, an analyst said. 

At 9am, the local note had risen to 4.3630/3680 against the greenback, from Wednesday’s close at 4.3700/3725.

According to the Department of Statistics Malaysia, the country’s unemployment rate showed a downward trend, with 600,900 persons unemployed in November 2022, compared with 602,000 in October 2022. 

The department also said on Wednesday that Malaysia’s wholesale and retail trade sales expanded 13.9% year-on-year (y-o-y) to RM133.9 billion in November, mainly boosted by growth in the retail trade sub-sector.

The manufacturing sector also continued its double-digit growth to record RM159.2 billion in sales in November, an increase of 11.8% y-o-y.

Meanwhile, the industrial production index rose by 4.8% in November against 4.6% in the preceding month, supported by an expansion in the mining, manufacturing and electricity sectors. 

“We are heading towards better economic growth overall post pandemic. The improvement in these economic sectors has increased investors’ confidence regarding our future economic growth,” the analyst told Bernama. 

On external factors, ActivTrades trader Dyogenes Rodrigues Diniz said investor sentiment turned cautious ahead of the release of US consumer price index (CPI) data.

The CPI measures variations in prices of goods, products and services, and is a reading of inflation in the US.

“This is a very closely watched indicator, and influences the decision of the US Federal Reserve and its monetary policies, hence markets are often quiet ahead of the release.

“From a technical point of view, the US dollar-ringgit [pair] is in a support region, and if the price manages to break above 4.4060, it could rise to as high as 4.4850 within a few days. If it breaks below the 4.3600 area, however, it may fall to as low as 4.2500,” he said. 

Meanwhile, the ringgit traded mostly lower against a basket of major currencies.

The local currency eased versus the pound to 5.3024/3084 from 5.3017/3047 at Wednesday’s close, fell against the euro to 4.6959/7013 from 4.6938/6965 previously, and declined vis-a-vis the yen to 3.3083/3126 from 3.2984/3007.

However, it appreciated against the Singapore dollar to 3.2797/2840 from 3.2820/2841 at Wednesday’s close.