SPI Asset Management managing director Stephen Innes said that last Friday’s nonfarm payrolls data showed a marked slowdown in US job creation, prompting traders to sharply increase bets on monetary easing.

“Market-implied expectations for Fed rate cuts this year jumped to 64 basis points, up from 33 basis points before the release.

“The probability of a September rate cut surged above 90%, while October is now fully priced for the first move,” he told Bernama.

Innes said the shift triggered a widespread sell-off in the US dollar and US government bonds, boosting demand for emerging market currencies, including the ringgit, as sentiment pivoted towards a more dovish Fed outlook.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit is likely to exhibit a positive trend as Bank Negara Malaysia is expected to maintain its current overnight policy rate (OPR) stance.

“This would mean that the interest differentials between the Fed Fund Rate and the OPR would narrow in the months to come,” he said.

At 6pm, the local currency rose to 4.2350/4.2385 versus the US dollar from Friday’s close of 4.2750/4.2815.

Meanwhile, at the close, the ringgit ended lower against major currencies.

It fell against the Japanese yen to 2.8652/2.8677 from 2.8407/2.8452 at the close on Friday, depreciated versus the British pound to 5.6296/5.6342 from 5.6208/5.6293, and declined against the euro to 4.8978/4.9018 from 4.8752/4.8826 previously.

The ringgit was mixed against regional peers.

It improved against the Singapore dollar to 3.2878/3.2908 from 3.2907/3.2960 and edged higher against the Indonesian rupiah to 258.2/258.5 from 258.8/259.4 at Friday’s closing.

However, it inched down versus the Thai baht to 13.0452/13.0616 from 13.0058/13.0319 and weakened against the Philippine peso to 7.38/7.39 from 7.35/7.36 previously.