Ringgit expected to gain ground next week amid weaker US job data

KUALA LUMPUR: The Malaysian ringgit may gain against the US dollar in the coming week, according to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid. This is as a result of weaker-than-expected US employment data, which could push the Federal Reserve to skip a rate hike this month. Mohd Afzanizam noted that the latest US labor market figures indicate that the greenback may be weighed down, providing support for the local currency.

He explained that the US non-farm payrolls (NFP) showed only a rise of 29,000 jobs in September, far below the anticipated 89,000. Moreover, the unemployment rate climbed to 4.2%. The focus for the coming week will be on the tabling of Malaysia's Budget 2027 on October 9, as market participants will scrutinize the government's fiscal deficit target for 2027 and whether there will be any adjustments to the current deficit target of 3.5% of GDP.

The government's total revenue grew by 12% to RM165.4 billion in the first half of 2026, primarily due to a 32% increase in sales and service tax collection. However, operating expenditure rose by 14.4% to RM94.6 billion, mainly driven by a 61.2% increase in subsidies to RM38.0 billion during the period.