It started the day trading at 4.3965/4.4050 versus the US dollar from 4.3995/4.4095 at the close last Friday.

The currency market was closed yesterday for the New Year replacement holiday.

SPI Asset Management managing director Stephen Innes said the local currency rallied this morning as buying flows on China’s reopening continued to help Asia currencies.

“Even though China’s economy could remain weak in the short-term, the market is likely to look past this down-swing in anticipation of more stimulus policies,” he told Bernama.

“The ringgit could see a good week on the prospect of more support for China’s economy,” he said, adding that the local currency is expected to trade between 4.38 and 4.41 throughout this week.

Bank Islam Malaysia Bhd chief economist Firdaos Rosli said as the US Federal Reserve (Fed) is committed to cooling the labour market, the December non-farm payroll (NFP) could be the main catalyst for the next direction.

“If the reading remains solid, it would prompt the central bank to take action to break the tight job situation, prolonging the bear market,” he told Bernama.

He said the unveiling of the latest federal open market committee meeting minutes would draw attention as investors search for clues on the price pressure movement, aside from recession fears due to the aggressive rate hikes globally.

“Notwithstanding the International Monetary Fund’s statement that a third of the global economy will face a recession this year, the Fed may likely pivot as early as the second quarter of 2023.

“As such, we foresee the ringgit to trade between RM4.39 and RM4.41 for this week,” he added.