KUALA LUMPUR, Aug 10 — The Malaysian ringgit opened higher against the US dollar today as weaker-than-expected United States non-farm payrolls (NFP) data put downward pressure on the greenback and dampened expectations of near-term interest rate hikes.
At 8:00 am, the local currency strengthened to 4.0875/0925 against the US dollar from Friday’s closing rate of 4.0885/0930.
The gains follow official data showing US NFP fell by 23,000 in July, standing in sharp contrast to market consensus expectations of 88,000 jobs created.
Further economic indicators highlighted ongoing labor market softening, as the US Labour Force Participation Rate (LFPR) fell for an eighth consecutive month to 61.4 per cent. Additionally, Average Hourly Earnings grew at a moderate pace of 3.2 per cent in July, signaling reduced momentum in the US economy.
As a result of the disappointing labor data, market odds for an interest rate hike at the Federal Open Market Committee’s (FOMC) upcoming September meeting dropped to 43.9 per cent, down from 57 per cent prior to the NFP release.
Despite the early gains, ongoing geopolitical developments remain a key focus for market participants, with uncertainties surrounding the reopening of the Strait of Hormuz acting as a wildcard that could keep overall market sentiment in check. The ringgit is projected to trade within the RM4.07 to RM4.09 range throughout today’s session.
In contrast to its performance against the greenback, the ringgit traded lower against a basket of major international currencies.
The local unit fell against the Japanese yen to 2.5887/5920 from Friday’s close of 2.5813/5843, slipped against the euro to 4.7239/7297 from 4.7132/7184, and declined against the British pound to 5.5140/5208 from 5.4949/5010 previously.
Meanwhile, the local note delivered mixed results against regional currencies. It eased against the Singapore dollar to 3.1966/2008 from 3.1911/1949 and depreciated against the Thai baht to 12.3732/3944 from 12.3665/3843. However, the ringgit remained virtually unchanged against the Philippine peso at 6.70/6.72 from 6.71/6.72 and held flat against the Indonesian rupiah at 228.4/228.7.
–NMT
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