Fresh employment and forecast payroll data from the US points to a high possibility that its restrictive monetary policy will be maintained to bring inflation down to a targeted level of 2%, an economist said today.

For instance, the US non-farm employment change data for June came in at 497,000, more than double the forecast of 228,000.

In addition, the non-farm payroll is expected to rise by 339,000 in June based on consensus estimates, from 225,000 in May.

Put together, the data and forecast may force the US Federal Reserve (Fed) to dig into efforts to reduce inflation, Bank Muamalat Malaysia Bhd chief economist and social finance head Afzanizam Rashid said.

“The US dollar should be well supported for as long as the market believes the Fed will continue its interest rate hike campaign,” he told Bernama.

The assumption that the Fed is still on track to raise interest rates by another 25 basis points (bps) in its next Federal Open Market Committee (FOMC) meeting on July 25 and 26 will weigh the ringgit down further.

The ringgit opened at 4.6680/4.6725 versus the US dollar compared with 4.6580/4.6630 at its close yesterday.

It also traded lower against a basket of major currencies.

It declined vis-a-vis the euro to 5.0811/5.0860 from 5.0600/5.0654 at yesterday’s close, slipped against the Japanese yen to 3.2401/3.2434 from 3.2323/3.2359 and weakened against the British pound to 5.9433/5.9490 from 5.9310/5.9374 at the close yesterday.

The local note traded mixed against other Asean currencies.

The ringgit was down versus the Singapore dollar at 3.4496/3.4532 from 3.4458/3.4497 at yesterday’s close but rose against the Thai baht to 13.2335/13.2516 from 13.2881/13.3088.

It was almost flat against the Indonesian rupiah to 309.9/310.4 from 309.3/309.8 and flat against the Philippine peso at 8.39/8.40.