Ringgit Buoyed by US Interest Rate Hike Expectations

The ringgit has started trading slightly higher against the US dollar, driven by expectations of a potential interest rate hike in the United States. According to Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, the stronger-than-expected US non-farm payrolls data suggests that the Federal Reserve will likely raise its benchmark interest rate at the upcoming Federal Open Market Committee meeting on September 15-16.

The ringgit opened at 4.0415/0500 against the greenback today, up from last Friday's close of 4.0425/0465. Dr Afzanizam noted that Asian currencies may face a choppy trading session today, with the ringgit potentially trading in a wider margin of around 4.04 to 4.06 against the US dollar.

Stephen Innes, global strategist at Quintex Intel, also commented on the situation, stating that the higher energy prices could still provide some support to Malaysia due to its position as a net energy exporter. He added that Malaysia's strengthening position in the regional artificial intelligence and semiconductor supply chain will give the ringgit additional medium-term support.