Ringgit Edges Higher Against US Dollar at Opening on Weak US Labour Data

KUALA LUMPUR, Aug 5 — The ringgit opened slightly higher against the US dollar on Wednesday morning, buoyed by weaker-than-expected economic data from the United States that put downward pressure on the greenback.

At 8:00 am, the local note edged up to 4.0940/0995 against the US dollar from Tuesday’s closing rate of 4.0945/0985.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the latest US Job Openings and Labour Turnover Survey (JOLTS) revealed job openings dropped for a second straight month to 7.36 million in June from 7.54 million in May. He added that the US Dollar Index slipped 0.01 percent to 99.890 points following the report, providing immediate support for the local currency.

“Following the JOLTS report, the ringgit could receive some support today. Therefore, the ringgit is expected to trade within a range of RM4.08 to RM4.10,” Afzanizam said.

Echoing a positive outlook, SPI Asset Management managing partner Stephen Innes indicated that the ringgit is anticipated to trade with a firmer bias, bolstered by sustained capital inflows into Asia’s technology sector and resilient global risk sentiment. However, he cautioned that upside gains would likely remain capped as market participants exercise prudence ahead of Friday’s US non-farm payrolls report.

“The broader currency markets remained largely range-bound despite improving risk appetite and a sharp decline in oil prices, with the latter reinforcing expectations of a more dovish policy stance by the US Federal Reserve,” Innes explained. “The difficulty is that the decline in oil prices is also shaping the policy outlook for other central banks, albeit to varying degrees. As each currency adjusts to its respective central bank’s policy reaction, the relative impact across the major currency pairs is being compressed ahead of Friday’s NFP report.”

Despite its gains against the greenback, the ringgit traded mostly lower against a basket of major and regional currencies.

Against major currencies, the local currency eased against the Japanese yen to 2.5952/5989 from 2.5929/5956 at Tuesday’s close, depreciated against the euro to 4.7212/7275 from 4.7120/7166, and slipped versus the British pound to 5.5060/5134 from 5.5034/5088.

Against regional peers, the ringgit weakened against the Singapore dollar to 3.1932/1980 from 3.1899/1932 and dropped against the Thai baht to 12.3113/3330 from 12.2487/2654. It also edged down against the Indonesian rupiah to 227.1/227.5 from 227.1/227.4, while remaining flat against the Philippine peso at 6.69/6.70.

–NMT