Ringgit Rises on Weak US Jobs Data, Interest Rate Hike Odds Dip

The ringgit strengthened against the US dollar on Monday due to weaker non-farm payrolls data from the United States.

In July, the US added only 23,000 jobs, falling short of a consensus estimate of 88,000. The Labour Force Participation Rate also continued to decline for eight consecutive months, dropping to 61.4 per cent.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam noted that the US labour market is not entirely robust, citing moderate growth in Average Hourly Earnings at 3.2 per cent in July.

This led to a decrease in the odds of an interest rate hike at the September Federal Open Market Committee meeting from 57 per cent to 43.9 per cent. However, Afzanizam also mentioned that uncertainties surrounding the Strait of Hormuz could keep market sentiment in check.