KUALA LUMPUR, Aug 4 — The ringgit opened stronger against the US dollar today as hopes for an upcoming United States (US) rate cut increased following the latest data that showed a weaker US labour market, an economist said.
At 8 am, the local note climbed to 4.2350/2550 against the greenback from Friday's close of 4.2750/2815.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Bernama that the US Non-farm Payroll (NFP) data came in lower than expected and surprised the market.
The US Bureau of Labour Statistics (BLS) reported on Friday that NFP stood at 73,000 for July, coming in much lower than the market consensus of 110,000.
Mohd Afzanizam believed that the US labour market has weakened, which would bolster the case for an interest cut in the upcoming Federal Open Market Committee (FOMC) meeting in September.
“Already, the US Dollar Index (DXY) has declined to 98.708 points while the 2-year US Treasury yield saw a steep drop by 25 basis points to close at 3.69 per cent last Friday.
“On that note, the ringgit may gain some strength today, having depreciated by 0.22 per cent on Friday to 4.2782,” he said, adding that the ringgit is likely to trade within a range of 4.26 to 4.27 today.
Nevertheless, the ringgit was lower against other major currencies in early trade.
It weakened against the Japanese yen to 2.8749/8887 from 2.8407/8452 on Friday, fell slightly against the British pound to 5.6296/6562 from 5.6208/6293, and was lower against the euro at 4.9075/9307 from 4.8752/8826.
Conversely, the local unit was mostly higher versus regional currencies.
The ringgit rose against the Singapore dollar to 3.2873/3031 from Friday’s close of 3.2907/2960, but slipped versus the Thai baht to 13.0388/1084 from 13.0058/0319.
It went up against the Philippine peso at 7.28/7.32 from 7.35/7.36 last week and gained against the Indonesian rupiah to 256.4/257.8 from 258.8/259.4.
