KUALA LUMPUR – The ringgit opened firmer against the greenback today as the latest US jobs data pointed to slowing labour demand, suggesting the American economy is cooling and further strengthening expectations for an interest rate cut, said an analyst.
At 8am, the local currency climbed to 4.3380/3545 versus the greenback from yesterday’s close of 4.3505/3560.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said demand for the ringgit would remain guarded in the near term against such global economic uncertainty.
The Jobs Opening and Labour Turnover Survey showed yesterday that the number of job openings in the United States declined more than expected to 7.673 million in July versus consensus estimates of 8.09 million and lower compared to June’s figure of 7.91 million.
“Hence, the US Federal Reserve (Fed) is almost certain to deliver a rate cut when the Federal Open Market Committee (FOMC) members meet on Sept 17 and 18,” Afzanizam told Bernama.
Bank Negara Malaysia’s monetary policy committee (MPC) will deliver its verdict on interest rates today, where most economists expected no change in the overnight policy rate (OPR).
“What matters now is the latest assessment by the MPC, especially the global growth outlook and domestic inflation,” he said.
Afzanizam warned of caution as the anticipation for an aggressive rate cut by the Fed could give the impression that global growth prospects have become more challenging with China also struggling to maintain its five per cent growth target this year.
The ringgit traded higher against a basket of major currencies this morning.
The local currency was higher vis-a-vis the euro to 4.8065/8248 from 4.8082/8143 on Wednesday and was better against the British pound at 5.7019/7236 from 5.7052/7125 previously. It went down versus the Japanese yen to 3.0262/3.0379 from 2.9981/3.0021 yesterday.
The ringgit traded mostly higher against Asean currencies.
The local note edged up against the Singapore dollar to 3.3280/3409 from 3.3299/3344, rose versus the Indonesian rupiah to 280.2/281.4 from 281.0/281.5, and grew against the Philippine peso to 7.67/7.70 from 7.69/7.70 but fell vis-a-vis the Thai baht to 12.7584/8153 from 12.7096/7294 yesterday. – September 5, 2024