Ringgit expected to gain ground next week amid weaker US job data

KUALA LUMPUR: The ringgit is expected to strengthen against the US dollar next week, trading in the range of RM4.07 to RM4.08, as weaker-than-expected US employment data could reinforce expectations that the US Federal Reserve might skip a rate hike this month.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that the latest US labour market data could weigh on the greenback and provide support for the ringgit.

He pointed out that US non-farm payrolls (NFP) rose by only 29,000 jobs in September, well below market expectations of 89,000, while the unemployment rate increased to 4.2 per cent.

Mohd Afzanizam said the focus next week would be on the tabling of Malaysia's Budget 2027 on Oct 9, with market participants likely to assess the government's fiscal deficit target for 2027 and whether there would be any adjustment to this year's deficit target of 3.5 per cent of gross domestic product (GDP).

He said the government's total revenue grew 12 per cent to RM165.4 billion in the first half of 2026, driven mainly by a 32 per cent increase in sales and service tax collection.

However, operating expenditure rose 14.4 per cent to RM94.6 billion, underpinned by a 61.2 per cent increase in subsidies to RM38.0 billion during the period, he noted.

"In this regard, market participants will be observing the macroeconomic targets, such as GDP, inflation and the fiscal deficit for 2027 given that external risks remain fairly visible next year," he added.

Meanwhile, on a Friday-to-Friday basis, the ringgit weakened against the greenback to 4.0820/0870 from 4.0715/0765 a week earlier.

The local currency traded mostly lower against a basket of other major currencies during the week.

It strengthened to 4.5927/5983 versus the euro from 4.6378/6435 in the previous Friday.

However, the ringgit depreciated against the British pound to 5.3927/3993 from 5.3907/3973 a week earlier and fell vis-a-vis the Japanese yen to 2.5906/5941 from 2.5764/5797 previously.

It traded mixed against ASEAN currencies.

The local note slipped versus the Singapore dollar to 3.1908/1952 from 3.1858/1900 a week earlier and weakened against the Indonesian rupiah to 228.2/228.6 from 227.4/227.8.

In contrast, it appreciated vis-a-vis the Thai baht to 12.1579/1778 from 12.2036/2234 at the end of last week and was little changed against the Philippine peso to 6.52/6.54 from 6.52/6.53 previously.