KUALA LUMPUR: The ringgit opened flat against the US dollar on Friday as external factors, including expectations of a restrictive US monetary policy, offset support from a weaker greenback.
At 8 am, the ringgit was almost unchanged at 4.0800/0845 against the greenback, compared with Thursday’s close of 4.0800/0835.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) fell 0.53 per cent to 102.005 points, in tandem with a decline in Brent crude oil prices to around US$105 per barrel. The fall in the DXY, which measures the greenback against a basket of major currencies, would normally support the ringgit by easing upward pressure on the US dollar.
However, persistent US inflationary pressures and expectations that the US Federal Reserve (Fed) would maintain its restrictive monetary policy could temper the ringgit’s gains.
Mohd Afzanizam also said the International Energy Agency’s (IEA) pledge to release 100 million barrels of oil from its reserves had calmed the oil market, albeit temporarily, as supply disruptions remained unresolved.
At the same time, he said valuation concerns over artificial intelligence (AI)-related stocks had triggered a flight to safety, driving down US Treasury yields.
“Still, the latest US Producer Price Index (PPI) reading for September suggested that inflation remained elevated, with the index rising 6.3 per cent, exceeding the consensus forecast of 5.3 per cent. This could mean the Fed is likely to maintain its restrictive stance at its Federal Open Market Committee (FOMC) meeting at the end of this month,” Mohd Afzanizam told Bernama.
On the domestic front, the market would be focusing on the release of Malaysia’s advance estimate of gross domestic product (GDP) for the third quarter (3Q) of 2026 today.
“We foresee that the provisional figure could reach around 5.2 per cent. Although this would be slower than the 6.0 per cent growth recorded in 2Q 2026, we still think growth remains decent, as it continues to exceed its trend level. Hence, expectations of normalisation of the overnight policy rate (OPR) would provide support to the ringgit,” he said.
Mohd Afzanizam expects the US dollar-ringgit pair to trade between RM4.07 and RM4.09 today.
At the opening, the ringgit traded mostly firmer against a basket of major currencies.
It strengthened against the Japanese yen to 2.5797/5827 from 2.5869/5892 at Thursday’s close and advanced against the euro to 4.5741/5791 from 4.5761/5801. However, it weakened against the British pound to 4.4138/4197 from 4.4101/4147 at Thursday’s close.
Against its ASEAN peers, the ringgit traded mixed.
It was almost flat against the Indonesian rupiah at 227.4/227.8, compared with 227.4/227.7 at Thursday’s close, and remained unchanged against the Philippine peso at 6.47/6.48. The local note edged lower against the Singapore dollar to 3.1820/1858 from 3.1818/1848 at Thursday’s close, but strengthened against the Thai baht to 12.1675/1889 from 12.1758/1914.