Ringgit opens flat against greenback as markets weigh US interest rate outlook

 The US dollar index fell 0.53% to 102.005 points, in tandem with a decline in the Brent crude oil price to around US$105 per barrel.

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 8am, the ringgit was almost unchanged at 4.0800/4.0845 against the greenback compared with yesterday’s close of 4.0800/4.0835.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US dollar Index (DXY) fell 0.53% to 102.005 points, in tandem with a decline in the Brent crude oil price to around US$105 per barrel. The decline in the DXY, which measures the greenback against a basket of major currencies, would normally lend support to 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.

Afzanizam also said the International Energy Agency’s (IEA) pledge to withdraw 100 million barrels of oil from its reserves has calmed the oil market, albeit momentarily, as supply disruptions remained unresolved.

At the same time, he said valuation concerns in artificial intelligence (AI)-related stocks triggered a flight-to-safety move, which drove down US Treasury yields.

“Still, the latest print on the US Producer Price Index (PPI) reading for September suggested that the inflation rate remains elevated, with the index rising 6.3%, exceeding the consensus forecast of 5.3%. This could mean the Fed is likely to maintain its restrictive posture at its Federal Open Market Committee (FOMC) meeting at the end of this month.” Afzanizam told Bernama.

On the domestic front, the market would be focusing on the release of Malaysia’s advance estimate of the third quarter 2026 gross domestic product (GDP) today.

“We foresee that the provisional figure could reach around 5.2%, although slower than the 6% growth recorded in Q2 2026, we still think the growth remains decent as it continues to grow above its trend level. Hence, the anticipation of normalisation of the overnight policy rate (OPR) would provide support to the ringgit,” he said. 

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 2.5797/2.5827 from 2.5869/2.5892 at yesterday’s close, advanced against the euro to 4.5741/4.5791 from 4.5761/4.5801, but fell against the British pound to 5.4138/5.4197 from 5.4101/5.4147 yesterday.

Against its Asean peers, the ringgit traded mixed. 

It was almost flat against the Indonesian rupiah at 227.4/227.8 from 227.4/227.7 at yesterday’s close and remained unchanged against the Philippine peso at 6.47/6.48. The local note dropped marginally against the Singapore dollar to 3.1820/3.1858 from 3.1818/3.1848 at yesterday’s close but was better against the Thai baht at 12.1675/12.1889 from 12.1758/12.1914.  - FMT