Ringgit Buoys on Strong US Jobs Data Ahead of Key CPI Release
The Malaysian ringgit opened slightly higher against the US dollar on September 7, ahead of the key US Consumer Price Index (CPI) data release. 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 Dr Mohd Afzanizam Abdul Rashid attributed the gain to stronger-than-expected US non-farm payrolls (NFP) data, which suggests a potential interest rate hike by the Federal Reserve. The NFP came in at 162,000 in August, well above the consensus forecast of 55,000.
Dr Mohd Afzanizam noted that labour force participation rate improved to 61.6 per cent after experiencing a persistent drop since January this year. Asian currencies may face a choppy trading session today, with the ringgit trading in a wider margin, potentially around 4.04 to 4.06 against the greenback.
Quintex Intel global strategist Stephen Innes said that the ringgit would trade relatively tight early in the week, but with a modestly positive bias. He highlighted the support provided by higher energy prices and Malaysia's strengthening position in the regional artificial intelligence (AI) and semiconductor supply chain.