Ringgit Closes Marginally Higher Against US Dollar Ahead of Key US Economic Data

KUALA LUMPUR, Aug 5 — The ringgit closed marginally higher against the US dollar today despite cautious market sentiment as investors await critical economic data from the United States, including the non-farm payrolls (NFP) report for insights into the Federal Reserve’s monetary policy path.

At 6:00 pm, the local unit edged up to 4.0920/0960 against the greenback compared with Tuesday’s closing level of 4.0945/0985.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) rose 0.03 percent to 99.883 points while market participants awaited the release of the US Institute for Supply Management (ISM) Services Index, with consensus estimates pointing to a reading of 54.5 for July.

“Earlier, the ISM Manufacturing Index came in stronger than expected, suggesting that business sentiment in the manufacturing sector remained resilient,” Afzanizam said.

Looking ahead, Afzanizam highlighted that investor attention will focus heavily on Friday’s US NFP report, with consensus projections expecting 88,000 jobs added in July compared with 57,000 in June.

“The unemployment rate is expected to remain unchanged at 4.2 per cent,” he stated.

He added that broader financial market volatility has intensified as the new US Fed chair, Kevin Warsh, has shown less inclination toward offering explicit forward guidance on monetary policy.

“Without clear forward-looking signals from the US Fed, investors are relying more heavily on incoming economic data to formulate their trading strategies, which has contributed to heightened market uncertainty,” Afzanizam explained.

Meanwhile, the ringgit closed lower against a basket of major currencies. It declined against the Japanese yen to 2.5940/5967 from 2.5929/5956 at Tuesday’s close, weakened against the euro to 4.7222/7268 from 4.7120/7166, and slipped against the British pound to 5.5107/5161 from 5.5034/5088.

The local note also traded lower against regional peers, easing against the Singapore dollar to 3.1916/1950 from 3.1899/1932 yesterday and depreciating against the Thai baht to 12.3216/3381 from 12.2487/2654. Additionally, it slid against the Indonesian rupiah to 228.1/228.5 from 227.1/227.4 and fell versus the Philippine peso to 6.73/6.74 from 6.69/6.70.

–NMT