At 8am, the local unit strengthened to 4.2095/4.2270 against the greenback, from Thursday’s close of 4.2155/4.2245.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Dollar Index (DXY) fell 0.72% to 97.0921, its lowest since March 2022, as data indicated a cooling labour market and moderating inflation trajectory.

He noted the core Producer Price Index (PPI) for May rose 3.0% year-on-year, below the consensus estimate of 3.1%. Initial jobless claims also rose to 248,000 last week, higher than the forecast of 242,000.

“Such data are seen as critical in shaping the US Federal Reserve’s (Fed) stance ahead of the Federal Open Market Committee (FOMC) meeting on June 17 and 18,” he added.

Afzanizam said while the Fed is expected to keep the Federal Funds Rate unchanged at 4.50%, market participants will be watching the central bank’s quarterly economic projections closely.

“In March, Fed officials projected the policy rate at 3.9% for 2025, which implies two rate cuts this year.

“On that note, we believe emerging market currencies, including the ringgit, are poised to appreciate,” he said.

At the same time, the ringgit traded mostly lower against a basket of major currencies.

It rose against the euro to 4.8860/4.9063 from Thursday’s close of 4.8765/4.8869, but weakened vis-à-vis the Japanese yen to 2.9412/2.9539 from 2.9329/2.9394, and slipped against the British pound to 5.7363/5.7601 from 5.7213/5.7335.

Against Asean currencies, the ringgit was mixed.

It edged up against the Philippine peso to 7.54/7.58 from 7.55/7.57 and gained slightly versus the Indonesian rupiah to 259.1/260.3 from 259.5/260.2.

However, it eased against the Singapore dollar to 3.2936/3.3078 from 3.2934/3.3006, and declined against the Thai baht to 13.0124/13.0754 from 12.9828/13.0173.