Ringgit opens mixed as stronger US data lifts greenback, traders eye October rate hike odds

On October 1, the Malaysian ringgit experienced a mixed opening, initially strengthening against a basket of major currencies but then weakening slightly against the US dollar, according to wire reports. At 8 a.m., the ringgit slipped to 4.0790/0860 against the US dollar, a decline from Wednesday's close of 4.0785/0820. The reason behind this movement was the release of stronger-than-expected US economic data, which bolstered the greenback's value.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that the US final gross domestic product growth for the second quarter of 2026 was reported at 2.2% - surpassing the consensus estimate of 1.5%. Additionally, the Automatic Data Processing employment change for September came in at 90,000, exceeding the market's prediction of 73,000.

These positive indicators led to a shift in market sentiment, reducing the odds of a rate hike in October from over 70% to below 50%, he said. The US Dollar Index (DXY) initially dropped to 101.05 points before rebounding to 101.37. The economist noted that while the odds of an October rate hike are not entirely eliminated due to the positive labor market data, it is no longer a certainty.

Looking ahead, the ringgit is anticipated to fluctuate within a range of RM4.08 to RM4.09 today, pending the release of US non-farm payrolls (NFP) data on Friday. Against major currencies, the ringgit made gains against the euro, British pound, and Japanese yen, while its value remained stable against Asean currencies and the Philippine peso.