Ringgit rises against US dollar ahead of Q3 GDP estimates

KUALA LUMPUR:

The ringgit closed higher against a weaker US dollar as investors awaited Malaysia’s advance third-quarter (Q3) gross domestic product (GDP) estimates, due on Friday.

At 6pm, the ringgit rose to 4.0800/4.0835 against the greenback from yesterday’s close of 4.0805/4.0850.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said Malaysia’s GDP for Q3 2026 is projected to come in at around 5.2%.

“Although moderating from 6% in the preceding quarter, the economy is expected to remain resilient, supported by sustained domestic demand and investment activities.

“More importantly, the continued above-trend economic growth strengthens the case for further normalisation of the overnight policy rate (OPR) towards 3%, particularly as monetary policy settings should remain consistent with the economy’s underlying strength and evolving inflationary pressures,” he told Bernama.

Afzanizam also said that the US Dollar Index (DXY) surprisingly declined despite higher-than-expected US inflation, with September’s Consumer Price Index (CPI) rising to 3.7% from 3.4% in August, exceeding the market consensus of 3.6%.

He said in the fixed-income market, the 10-year US Treasury yield fell by 10 basis points to 5.09%, reflecting increased demand for safe-haven assets following the sell-off in technology stocks, particularly artificial intelligence (AI)-related companies.

“Concerns over stretched valuations and rising financing costs in the AI sector appear to have prompted investors to reassess US growth prospects.

“Meanwhile, cautious remarks from Federal Reserve officials have tempered expectations of an imminent interest rate hike despite the elevated inflation reading, contributing to the US dollar’s weakness,” said Afzanizam.

At the close, the ringgit traded lower against a basket of major currencies.

It eased against the Japanese yen to 2.5869/2.5892 from 2.5751/2.5781 at yesterday’s close, decreased against the euro to 4.5761/4.5801 from 4.5673/4.5723 and inched up against the British pound to 5.4101/5.4147 from 5.4132/5.4192.

With its Asean peers, the local note gained against the Indonesian rupiah to 227.4/227.7 from 227.9/228.2 and edged up against the Philippine peso to 6.47/6.48 from 6.50/6.51.

It rose against the Singapore dollar to 3.1818/3.1848 from 3.1829/3.1267 at yesterday’s close, but was lower against the Thai baht at 12.1758/12.1914 from 12.1498/12.1672.