The USD/MYR currency pair settled below recent high of 4.2320, its strongest level since August 27th, following a considerably slower than anticipated US job growth, which cemented expectations of a Federal Reserve interest rate cut this month.
Employers in all sectors of the US economy, excluding farming, added only 22,000 job positions in August, well below market consensus and the revised up 79,000 in July.
And, the unemployment rate went up to 4.3% in August, the highest since October 2021, from 4.2% in July.
The latest figures again highlighted signs of a cooling labor market.
“The data is giving evidence of what was feared, which is that what companies have experienced throughout the year because of changes in trading policy has added costs when it comes to tariffs,” Juan Perez, director of trading at Monex USA, was quoted as saying by Reuters.
“These costs can only be absorbed for so long and what is being manifested is that companies are struggling with hiring.”
Markets are now pricing in about an 88% chance of a 25 basis point Fed rate cut in September and a 12% chance of a 50 basis point cut.
Meanwhile, the Central Bank of Malaysia maintained its benchmark interest rate at 2.75% at its August policy meeting, in line with market consensus.
Policy makers remained supportive of economic growth amid price stability.
Headline inflation averaged 1.4% over the first seven months of 2025 and is forecast to remain moderate through 2025 and 2026.
The exotic Forex pair lost 0.10% for the week.
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