The Malaysian ringgit opened higher against the US dollar on Monday as weaker-than-expected US employment data reduced the likelihood of the US Federal Reserve (Fed) raising interest rates this month.
At 8:00 a.m., the ringgit appreciated to 4.0805/4.0870 against the US dollar, compared to 4.0820/4.0870 at last Friday's close.
Bank Muamalat Malaysia Bhd economist Afzanizam Rashid noted that the US non-farm payroll (NFP) report showed only 29,000 new jobs created in September, far below the market expectation of 90,000 jobs.
The US unemployment rate also rose to 4.2% from 4.1% in the preceding two months.
The data indicates a slowing US labor market, potentially influencing the Fed's monetary policy decision at its upcoming meeting on October 27–28.
Malaysian Economy Remains Robust
On the domestic front, Malaysia's economy expanded by 6.0% in the second quarter of 2026, up from 5.4% in the first quarter.
For the first half of the year, growth reached 5.7%, while Bank Negara Malaysia (BNM) projects annual growth of around 5%.
OPR Remains at 2.75%
BNM maintained the Overnight Policy Rate (OPR) at 2.75% in September. Future decisions will depend on developments regarding inflation, economic growth, and global financial conditions.
Inflation Rises Slightly
Malaysia's inflation rose to 1.9% in August, up from 1.8% in July, driven primarily by the transport sector. BNM projects headline inflation to range between 1.5% and 2.5% for 2026.
Bond Inflows Support the Ringgit
Foreign investor demand for Malaysian bonds has also shown positive momentum. Net inflows into the bond market reached RM15.9 billion in August, comprising RM10.6 billion in Malaysian Government Securities (MGS) and Government Investment Issues (GII).
These inflows have the potential to support demand for the ringgit, even though currency movements remain influenced by global sentiment.
Mixed Trading for the Ringgit
Against other major currencies, the ringgit strengthened versus the Japanese yen to 2.5867/2.5910 and the euro to 4.5918/4.5991, but weakened against the British pound to 5.4030/5.4116.
Among ASEAN currencies, the ringgit appreciated against the Singapore dollar and the Thai baht. It remained unchanged against the Philippine peso at 6.52/6.54 and the Indonesian rupiah at 228.2/228.6.
Overall, weak US employment data provided room for the ringgit to strengthen, while domestic economic growth and bond inflows served as supporting factors.
However, the ringgit's trajectory remains dependent on Federal Reserve policy developments and upcoming US economic data.
