Kuala lumpur: The ringgit opened slightly higher against the US dollar on Monday, buoyed by expectations of a potential United States (US) interest rate hike following stronger-than-expected US non-farm payrolls (NFP) data. At 8 am, the local currency inched up to 4.0415/0500 against the greenback from last Friday's close of 4.0425/0465.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the higher-than-expected NFP suggests the US Federal Reserve (Fed) is likely to raise its benchmark interest rate at the upcoming Federal Open Market Committee (FOMC) meeting on September 15-16. The NFP came in at 162,000 in August, well above the consensus forecast of 55,000, while July's figure was revised up to 21,000 from the initial estimate of 23,000. The labour force participation rate improved to 61.6 per cent after experiencing a persistent drop since January this year.
Mohd Afzanizam highlighted that Asian currencies might face a choppy trading session today, with the ringgit trading in a wider margin, potentially around 4.04 to 4.06 against the greenback. The market is currently watching the US consumer price index (CPI) on Friday. This data point is critical as FOMC members will reconvene next week to deliberate their decision on the Fed Funds Rate, which currently stands at 3.50 per cent-3.75 per cent. The odds for a 25-basis-point hike have increased, shaping market sentiments this week.
Meanwhile, Quintex Intel global strategist Stephen Innes remarked that the ringgit would trade relatively tight early in the week, albeit with a modestly positive bias. He pointed out that higher energy prices could still provide some support to Malaysia, given that it remains a net energy exporter overall, largely through its significant liquefied natural gas surplus. Innes also emphasized Malaysia's strengthening position in the regional artificial intelligence (AI) and semiconductor supply chain, which includes assembly and testing, advanced packaging, and increasingly digital infrastructure. This positioning offers the ringgit an additional medium-term support channel as global capital shifts toward the Asian AI investment theme.
The ringgit traded mostly higher against a basket of major currencies. It appreciated versus the British pound to 5.4629/4744 from 5.4663/4717 at last Friday's close, and edged up vis-a-vis the euro to 4.6934/7033 from 4.6962/7008. However, it slipped against the Japanese yen to 2.5871/5927 from 2.5832/5860 previously.
Against regional currencies, the local note traded mostly lower. It eased versus the Singapore dollar to 3.1893/1965 from 3.1888/1923 at the previous close and fell against the Thai baht to 12.2715/3033 from 12.2693/2863. The ringgit was almost flat against the Philippine peso at 6.45/6.47 from 6.45/6.46, and little changed vis-a-vis the Indonesian rupiah to 229.0/229.6 from 229.1/229.4 previously.