Ringgit Strengthens Against Dollar Amid Expectations of US Interest Rate Hike

The Malaysian ringgit strengthened against the US dollar on Monday due to expectations of a potential US interest rate hike after stronger-than-expected non-farm payrolls data.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the higher-than-expected NFP suggests the US Federal Reserve is likely to raise its benchmark interest rate at the upcoming Federal Open Market Committee meeting on September 15-16.

The ringgit opened at 4.0415/0500 against the greenback, a slight increase from last Friday's close of 4.0425/0465. Dr Afzanizam predicted that Asian currencies may face a choppy trading session today, with the ringgit potentially trading in a wider margin, around 4.04 to 4.06 against the US dollar.

Quintex Intel global strategist Stephen Innes agreed that the ringgit would trade relatively tight early in the week but with a modestly positive bias. He highlighted that higher energy prices could provide support to Malaysia as it remains a net energy exporter, largely through its significant liquefied natural gas surplus.