Ringgit Gains Early Ground as Softer US Confidence Data Weakens Dollar Ahead of Payroll Report
KUALA LUMPUR, July 3 — The ringgit opened stronger against the US dollar on Wednesday as weaker-than-anticipated US consumer confidence data reduced demand for the greenback, although investors remained cautious ahead of key American labour market figures due later in the week.
The local currency traded at 4.0775/4.0870 against the US dollar at the start of trading, improving from Tuesday’s closing level of 4.0825/4.0870.
Market sentiment was influenced by fresh economic data from the United States, where consumer confidence weakened more than analysts had expected, reinforcing expectations that investors will closely monitor upcoming labour market indicators for further clues on the direction of US monetary policy.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the latest reading from the US Conference Board showed its Consumer Confidence Index falling to 91.2 points in June, below the market consensus forecast of 94.4 points.
He said the weaker reading contributed to softer demand for the US dollar during early trading, although broader market sentiment remains cautious.
According to Mohd Afzanizam, investor attention has now shifted towards the release of the United States nonfarm payrolls report, which is widely regarded as one of the most closely watched indicators of labour market conditions and a key factor influencing future interest rate expectations.
Market consensus projects that the US economy added around 114,000 jobs in June, compared with 172,000 jobs recorded in May.
He noted that financial markets continue to focus primarily on expectations surrounding future decisions by the US Federal Reserve, particularly regarding the interest rate outlook.
At the same time, he observed that developments in global crude oil prices have attracted comparatively less attention despite remaining at relatively elevated levels.
During the session, West Texas Intermediate crude was trading around US$69.50 per barrel, while Brent crude hovered near US$72.92 per barrel.
Beyond the US dollar, the ringgit recorded a mixed performance against other major international currencies.
The local currency strengthened against the British pound, trading at 5.4027/5.4153, compared with 5.4036/5.4096 recorded at Tuesday’s close.
However, it slipped marginally against the euro, changing hands at 4.6537/4.6645 from the previous 4.6528/4.6580.
The ringgit also appreciated against the Japanese yen, improving to 2.5066/2.5126 from 2.5154/2.5183 at the previous close.
Performance against regional currencies was mixed as trading remained relatively subdued.
The Malaysian currency strengthened against the Singapore dollar to 3.1499/3.1577, compared with 3.1532/3.1570 previously.
It was largely unchanged against the Indonesian rupiah at 227.7/228.3 compared with 227.9/228.3, while trading against the Philippine peso remained virtually stable at 6.64/6.67, little changed from Tuesday’s closing level of 6.65/6.67.
Market participants are expected to remain focused on incoming US economic data over the coming days, particularly the nonfarm payrolls report, which could shape expectations for the Federal Reserve’s next policy moves and influence the direction of global currencies, including the ringgit.
