Kuala lumpur: The ringgit opened mostly higher against other major currencies, while remaining almost unchanged versus the US dollar, as escalating global tensions capped gains in the greenback ahead of the United States' non-farm payrolls (NFP) data release. At 8.05 am, the local currency slightly eased to 4.0895/0960 against the greenback, compared to the previous day's close of 4.0875/0920.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, noted that the NFP report, due later today, is expected to drive the US dollar higher, given the resilience of the US labor market. He explained that the US Dollar Index (DXY) had already risen by 0.25 percent to 99.930 points, as last week's initial jobless claims increased slightly to 199,000 from the prior week's 198,000, marking three consecutive weeks below the 200,000 level. Consensus estimates suggest the NFP is likely to improve to 88,000 in July, following a decline to 57,000 in June.
Mohd Afzanizam anticipates US dollar-ringgit trading to range between RM4.08 and RM4.10 throughout the day. Meanwhile, Quintex Intel's global strategist, Stephen Innes, commented on the ringgit's expected easing due to negative risk sentiment following new details about the Iran-Oman Strait of Hormuz agreement. He highlighted that the Islamic Revolutionary Guard Corps (IRGC) attacks on what it describes as hostile actors, particularly those supporting the US or Israel, have heightened concerns over regional security and energy flows.
Innes further stated that crude oil prices surged overnight, with the US dollar attracting a safe-haven bid ahead of the US NFP report. He added that if the stronger Automatic Data Processing (ADP) employment reading is mirrored in the official labor data, the combination of resilient US employment and higher oil prices could bolster another firm session for the greenback, rendering the ringgit defensive. Despite these challenges, the ringgit traded mostly higher against a basket of major currencies at the market's opening.