Ringgit Strengthens as Weak US Data Weighs on Dollar

The Malaysian ringgit opened slightly higher against the US dollar on Thursday, bolstered by improved market sentiment following weaker-than-expected United States economic data. This had a negative impact on the greenback, causing its value to dip.

According to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid, softer US economic data pushed the US Dollar Index (DXY) down 0.18% to 99.676. The Automatic Data Processing (ADP) Nonfarm Employment Change came in at 44,000 in July, below the consensus estimate of 68,000 and down from 95,000 in June.

The US Institute for Supply Management (ISM) non-manufacturing index stood at 54.1 in July, also below the consensus estimate of 54.5. Dr Mohd Afzanizam noted that US Federal Reserve Governor Lisa Cook had indicated she would support an interest rate hike if inflation remained persistently high.

The potential reopening of the Strait of Hormuz has kept Brent crude prices below $80 per barrel, further supporting the ringgit's value against the dollar. Dr Mohd Afzanizam predicted that the US dollar/ringgit pair will trade between RM4.07 and RM4.09 today.