Ringgit Edges Higher on US Rate Hike Expectations

The Malaysian ringgit opened slightly higher against the US dollar on September 7, despite expectations of a potential interest rate hike by the Federal Reserve. The local currency inched up to 4.0415/0500 against the greenback from last Friday's close of 4.0425/0465.

According to Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid, stronger-than-expected non-farm payrolls data suggests that the US Federal Reserve is likely to raise its benchmark interest rate at the upcoming Federal Open Market Committee meeting on September 15 and 16.

The labour force participation rate improved to 61.6 per cent after experiencing a persistent decline since January this year, said Mohd Afzanizam.

Quintex Intel global strategist Stephen Innes believes that the ringgit will trade within a relatively tight range early in the week with a modestly positive bias, due to higher energy prices and Malaysia's position in the regional artificial intelligence and semiconductor supply chain.