KUALA LUMPUR, Aug 7 — The ringgit opened stronger against the US dollar on Wednesday, bolstered by weaker-than-expected US economic data that pressured the greenback and prompted investors to reassess market sentiment, said an economist.

At 8 a.m., the local currency rose to 4.2180/2315 against the US dollar from 4.2260/2310 at yesterday’s close.

Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid told Bernama that the lower-than-forecast US ISM Services Purchasing Managers’ Index (PMI) has strengthened expectations that the Federal Reserve may lower interest rates as early as September.

“Weak US economic data, including last Friday’s non-farm payroll figures, have shifted the narrative. The probability of a rate cut is increasing as policymakers seek to support economic growth,” he explained.

On the domestic front, Mohd Afzanizam noted that the ringgit has performed well against the US dollar in recent days. However, he cautioned that some profit-taking could occur following the ringgit’s notable gains over the past two days.

“We expect the ringgit to trade between RM4.22 and RM4.24 against the US dollar today,” he added.

Meanwhile, the ringgit also strengthened against a basket of major currencies:

Japanese yen: rose to 2.8795/8889 from 2.8618/8654

British pound: strengthened to 5.6197/6377 from 5.6159/6226

Euro: slightly weaker at 4.8954/9110 from 4.8772/8830

Among regional currencies:

Singapore dollar: rose to 3.2841/2949 from 3.2793/2834

Thai baht: climbed to 13.0747/1229 from 13.0408/0627

Philippine peso: increased to 7.36/7.39 from 7.33/7.34

Indonesian rupiah: improved to 257.6/258.5 from 257.8/258.2

— BERNAMA