Ringgit Stengthens on Weaker US Jobs Data, Hormuz Uncertainty Lingers

The ringgit has strengthened against the US dollar after weaker-than-expected non-farm payrolls (NFP) data from the United States. According to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam, the NFP for July fell by 23,000, contrary to a consensus estimate of 88,000 jobs created. The US Labour Force Participation Rate continued to decline for eight consecutive months to 61.4 per cent, while Average Hourly Earnings grew at a moderate pace to 3.2 per cent in July.

As a result, the odds for an interest rate hike at the September Federal Open Market Committee (FOMC) meeting have decreased to 43.9 per cent compared to 57 per cent before the release of the NFP report. Dr Afzanizam noted that despite the weaker US data, the uncertainties surrounding the reopening of the Strait of Hormuz remain a key concern.

The ringgit traded mixed against regional currencies, with slight declines against the Singapore dollar and Thai baht, but little change against the Philippine peso and Indonesian rupiah. Dr Afzanizam predicted that the ringgit will hover around RM4.07 to RM4.09 today due to these market uncertainties.