Ringgit opens higher against dollar after weaker US jobs data

 The local currency strengthens to 4.0875/4.0925 against the greenback from Friday’s close of 4.0885/4.0930.

KUALA LUMPUR:

The ringgit opened higher against the US dollar on Monday on weaker US non-farm payrolls (NFP) data.

At 8am, the local currency strengthened to 4.0875/4.0925 against the greenback from Friday’s close of 4.0885/4.0930.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said that NFP for July fell by 23,000, in stark contrast to a consensus estimate of 88,000 jobs created.

He also stated that the US Labour Force Participation Rate (LFPR) continued to decline for eight consecutive months to 61.4%, while Average Hourly Earnings grew at a moderate pace to 3.2% in July, suggesting that the US labour market is not entirely robust.

Consequently, the odds for an interest rate hike at the September Federal Open Market Committee (FOMC) meeting have gone down to 43.9% compared to 57% before the release of the NFP report.

“Still, the uncertainties surrounding the reopening of the Strait of Hormuz remain the wildcard, which would keep market sentiment in check.

“Hence, it is expected that the ringgit will hover around RM4.07 to RM4.09 today,” he said.

Meanwhile, the local currency traded lower against a basket of major currencies.

It fell against the Japanese yen to 2.5887/2.5920 from 2.5813/2.5843 at Friday’s close, slipped against the euro to 4.7239/4.7297 from 4.7132/4.7184 and declined vis-a-vis the British pound to 5.5140/5.5208 from 5.4949/5.5010 previously.

However, the ringgit traded mixed against regional currencies.

It was lower against the Singapore dollar to 3.1966/3.2008 from 3.1911/3.1949 and eased versus the Thai baht to 12.3732/12.3944 from 12.3665/12.3843 at Friday’s close.

Meanwhile, the ringgit was little changed against the Philippine peso at 6.70/6.72 from 6.71/6.72 and was flat against the Indonesian rupiah at 228.4/228.7 previously. - FMT