The US labour market showed signs of a steady slowdown in October, with job openings increasing moderately and layoffs declining, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics on Tuesday. Job openings, a key indicator of labour demand, rose by 372,000 to 7.744 million at the end of October. However, the September figures were revised downward to 7.372 million from the initially reported 7.443 million. Economists polled by Reuters had anticipated 7.475 million vacancies. Labour Market Dynamics While job openings increased, hires dropped by 269,000 to 5.313 million, and layoffs fell by 169,000 to 1.633 million. These figures suggest a gradual cooling of the labour market rather than a sharp contraction. Hurricanes and strikes also impacted October’s labour market data. Rebuilding efforts in storm-affected regions and the resolution of strikes at Boeing and another aerospace company are expected to contribute to a ...
The Malaysian ringgit is showing strong signs of recovery, driven by robust economic growth and expectations of an imminent interest rate cut by the Federal Reserve (Fed).
After hitting a 26-year low in February, the ringgit is now less than 1% away from recovering its losses for the year. Oversea-Chinese Banking Corp predicts that the ringgit will appreciate to 4.60 per dollar by mid-2025. As of early Wednesday, the local currency rose 0.2% against the US dollar.
Factors Supporting the Ringgit's Rebound:
State Support and Currency Measures:
- Bank Negara Malaysia has encouraged state-linked firms to repatriate and convert foreign income.
- The central bank has utilized forwards to support the ringgit.
Global Technology Cycle:
- An upturn in the global technology cycle is aiding the recovery of Malaysian exports.
Yield Differential Dynamics:
- The Fed's anticipated rate cut is expected to narrow the record discount to the US, making ringgit-denominated assets more attractive to dollar-based investors.
Expert Opinions:
- Christopher Wong, OCBC Foreign Exchange Strategist:
- Predicts that the ringgit will recover as the Fed moves closer to cutting rates.
- Highlights foreign inflows into local shares, recovery in the semiconductor cycle, and potential recovery in the Chinese economy as additional support factors.
Economic Indicators:
US Swaps Market:
- Pricing in a full quarter-point cut by September, which would enhance the appeal of ringgit assets for dollar investors.
Exports:
- Malaysian exports returned to positive territory in Q2 2024, after contracting for 12 out of the previous 13 months due to weak demand from China.
GDP Growth:
- Malaysia's second-quarter GDP beat all estimates, suggesting continued economic momentum.
- This growth supports the central bank’s decision to maintain steady borrowing costs, further bolstering the ringgit.
The ringgit has emerged as Asia's top performer over the past three months, reflecting renewed investor confidence and strategic economic policies aimed at stabilizing and strengthening the currency.
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