Ringgit opens higher against US dollar

KUALA LUMPUR: On Monday, the Malaysian ringgit started the day stronger against the US dollar amid weaker-than-expected non-farm payrolls (NFP) data from the United States. By 8am, the local currency had risen to 4.0875/4.0925 against the greenback, a slight improvement from Friday's closing rate of 4.0885/4.0930. Afzanizam Rashid, the chief economist at Bank Muamalat Malaysia Bhd, explained that the July NFP figure came in at a disappointing 23,000, far below the projected 88,000 jobs added.

He also noted that the US Labour Force Participation Rate (LFPR) had continued its downward trend for eight straight months, reaching 61.4%. Meanwhile, Average Hourly Earnings grew by a modest 3.2% in July, hinting that the US labor market might not be as strong as initially perceived. This led to a decrease in the odds of an interest rate hike at the September Federal Open Market Committee (FOMC) meeting, which fell to 43.9% from 57% prior to the NFP release.

Rashid acknowledged that the situation surrounding the Strait of Hormuz remains uncertain and could impact market sentiment. As a result, he anticipated the ringgit to stay relatively stable within the RM4.07 to RM4.09 range throughout the day. However, the local currency showed a mixed performance against other major currencies.

It weakened against the Japanese yen, the euro, and the British pound, but remained relatively stable against the Singapore dollar, Thai baht, Philippine peso, and Indonesian rupiah.