Ringgit Holds Steady Against US Dollar and Gains Against Major Currencies Ahead of US Payrolls Data

KUALA LUMPUR, Aug 7 — The Malaysian ringgit opened mostly higher against major peer currencies today while remaining virtually unchanged against the US dollar, as escalating geopolitical tensions restrained greenback momentum ahead of the upcoming United States non-farm payrolls (NFP) report.

At 8:05 am, the local unit edged down marginally to 4.0895/0960 against the greenback from Thursday’s close of 4.0875/0920.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the NFP report scheduled for release tonight is likely to lend fresh support to the US currency, as underlying indicators point to continued resilience in the US labor market.

“The US Dollar Index (DXY) also rose by 0.25 per cent to 99.930 points. The initial jobless claims were slightly higher last week to 199,000 from 198,000 in the prior week and have remained below the 200,000 level for three consecutive weeks,” Mohd Afzanizam said.

“Based on the consensus estimates, the NFP is expected to improve to 88,000 during July after declining to 57,000 in June,” he added, projecting the US dollar-ringgit pair to trade within a range of RM4.08 to RM4.10 today.

Meanwhile, Quintex Intel global strategist Stephen Innes noted that overall risk sentiment has deteriorated following fresh details regarding the Iran–Oman agreement over the Strait of Hormuz.

“The Islamic Revolutionary Guard Corps (IRGC) attacks on what it describes as hostile actors, broadly including those supporting the US or Israel, have renewed concerns over regional security and energy flows,” Innes said.

“Therefore, crude oil prices have surged overnight, while the US dollar has attracted a safe-haven bid ahead of the US NFP report,” he added.

Innes indicated that should a stronger Automatic Data Processing (ADP) employment report be reflected in the official US labor statistics, the combination of robust employment and higher oil prices could support a firm session for the greenback, leaving the ringgit on the defensive.

Against a basket of major currencies, the ringgit traded mostly higher at the opening. It strengthened against the Japanese yen to 2.5808/5850 from 2.5892/5922 at Thursday’s close and advanced against the euro to 4.7123/7198 from 4.7162/7213, while easing slightly against the British pound to 5.5020/5108 from 5.4997/5058.

Against regional peers, the local note delivered a mixed performance. It edged up against the Singapore dollar to 3.1860/1913 from 3.1881/1919 and gained against the Thai baht to 12.3442/3701 from 12.3628/3801. However, it traded virtually flat against the Philippine peso at 6.72/6.74 compared with 6.72/6.73 and slipped slightly against the Indonesian rupiah to 228.1/228.6 from 228.0/228.4.

–NMT