How do US job market reports impact Malaysian currency sentiment?

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US job market reports can weaken Malaysian ringgit sentiment when they point to firmer US monetary tightening
The ringgit tends to fall when US job market reports come in stronger than expected, because markets then price in a higher chance of a US Federal Reserve rate hike and the US dollar stays supported. In a recent session, the ringgit ended lower against the US dollar as expectations of a Fed rate hike continued to weigh on regional sentiment.
May JOLTS strength shifted expectations and weighed on the ringgit
The US Job Openings and Labor Turnover Survey (JOLTS) for May showed a higher-than-consensus number of job openings. That type of stronger job-market signal can lead investors to focus more on potential additional monetary tightening by the Fed, which typically leaves Asian currencies weaker against the US dollar.
Fed rate hike expectations supported the US dollar, even with lower crude oil prices
The expectation of a Fed rate hike continued to support the strength of the US dollar despite lower crude oil prices. For a currency like the ringgit, that combination often translates into depreciation pressure because the US dollar’s relative appeal increases when investors expect higher US rates.
Traders monitored the June ADP Employment Change for further clues
Markets were also looking ahead to the ADP Employment Change for June for additional insight. This matters for currency sentiment because investors use incoming US labour data to reassess how likely further Fed tightening may be, which can quickly change near-term demand for the US dollar.
The ringgit’s moves varied by currency, but the dollar direction was clear
By 6 pm, the ringgit depreciated to 4.0920/0965 versus the US dollar from 4.0825/0870 at yesterday’s close, reflecting the same US dollar support theme. It fell versus the British pound to 5.4203/4262 and slid against the euro to 4.6600/6651, while it rose against the Japanese yen to 2.5144/5174; against regional currencies it was mixed, rising versus the Thai baht and Philippine peso but slightly lower versus the Singapore dollar and flat versus the Indonesian rupiah.

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How do US job market reports impact Malaysian currency sentiment?

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