Ringgit Gains Against Dollar on Weak US Payrolls Data

The Malaysian ringgit has strengthened against the US dollar following weak US non-farm payrolls data. The local currency opened higher at 4.0875/0925, up from Friday's close of 4.0885/0930.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam attributed the ringgit's gain to the lower-than-expected US job creation numbers for July, which fell by 23,000. This is in contrast to the consensus estimate of 88,000 jobs created.

Afzanizam also noted that the US labour force participation rate has declined for eight consecutive months to 61.4 per cent, while average hourly earnings grew at a moderate pace of 3.2 per cent in July.

As a result, the odds of an interest rate hike at the September Federal Open Market Committee (FOMC) meeting have decreased to 43.9 per cent from 57 per cent before the release of the NFP report.