KUALA LUMPUR, Sep 7 — The ringgit opened slightly higher against the US dollar today, despite growing expectations of a potential US interest rate hike following stronger-than-expected non-farm payrolls (NFP) data.
At 8 am, the local currency inched up to 4.0415/0500 against the greenback from last Friday's close of 4.0425/0465.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the stronger-than-expected NFP data suggested that the US Federal Reserve (Fed) was likely to raise its benchmark interest rate at the upcoming Federal Open Market Committee (FOMC) meeting on September 15 and 16.
“The NFP came in at 162,000 in August, well above the consensus forecast of 55,000, while July's figure was revised to 21,000 from the initial estimate of 23,000.
“The labour force participation rate improved to 61.6 per cent after experiencing a persistent decline since January this year,” he told Bernama.
Mohd Afzanizam said Asian currencies could face a choppy trading session today, with the ringgit potentially trading within a wider range of 4.04 to 4.06 against the greenback.
“Currently, the market is watching the US consumer price index (CPI) on Friday. This is a critical data point as FOMC members will reconvene next week to deliberate their decision on the Fed funds rate, which currently stands at 3.50 per cent to 3.75 per cent.
“The odds of a 25-basis-point hike have gone up, and that will shape market sentiment this week,” he said.
Meanwhile, Quintex Intel global strategist Stephen Innes said the ringgit was likely to trade within a relatively tight range early in the week, but with a modestly positive bias.
He said higher energy prices could continue to provide some support to Malaysia, given that the country remains a net energy exporter overall, largely due to its significant liquefied natural gas surplus.
“More importantly, from a structural perspective, Malaysia continues to strengthen its position in the regional artificial intelligence (AI) and semiconductor supply chain, spanning assembly and testing, advanced packaging and, increasingly, digital infrastructure.
“That gives the ringgit an additional medium-term support channel whenever global capital rotates towards the Asian AI investment theme,” he added.
The ringgit traded mostly higher against a basket of major currencies.
It appreciated against the British pound to 5.4629/4744 from 5.4663/4717 at last Friday's close and edged up against the euro to 4.6934/7033 from 4.6962/7008, but slipped against the Japanese yen to 2.5871/5927 from 2.5832/5860 previously.
However, the local currency traded mostly lower against regional currencies.
It eased against the Singapore dollar to 3.1893/1965 from 3.1888/1923 at the previous close and fell against the Thai baht to 12.2715/3033 from 12.2693/2863.
The ringgit was almost flat against the Philippine peso at 6.45/6.47 from 6.45/6.46 and little changed against the Indonesian rupiah at 229.0/229.6 from 229.1/229.4 previously.
