Ringgit climbs to strongest level since early March 2021

Traders are constructive on the ringgit in the near-term, and RM4 seems to be the next hurdle, says analyst.

KUALA LUMPUR:

 The ringgit climbed to another new high at today’s closing, touching RM4.0615, the strongest level last seen in early March 2021, as expectations of a US interest rate cut continued to pressure the greenback.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit continued to appreciate further today, as anticipation of an interest rate cut in the US remained the key factor driving the weaker US dollar.

“Clearly, foreign exchange traders are constructive on the ringgit in the near-term, and RM4 seems to be the next hurdle.

“The long-term average of US dollar-ringgit from the moment of the ringgit peg removal in 2005 to the present is about RM3.82. Hence, room for further appreciation is clearly visible,” he told Bernama.

Afzanizam said the US Dollar Index (DXY) fell 0.35% to 97.938 points.

Regarding the US gross domestic product data for the third quarter of 2025 (Q3 2025) due later today, he said that if the data turns out to be weaker than expected, it will solidify the anticipation of an interest rate cut going forward.

“Last night, Federal Reserve governor Stephen Miran spoke about the possibility of a US recession, and therefore, there is a need to cut the interest rate.

“The interest rate cut narrative appears to be gaining more traction.

“Hence, a softer US Q3 2025 GDP outcome will likely provide a boost to market sentiments, especially towards the emerging market currencies,” he added.

At 6pm, the local currency surged to 4.0615/4.0665 versus the greenback, from 4.0770/4.0800 at yesterday’s close.

The ringgit reached RM4.0747 on March 5, 2021.

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

It edged down against the euro to 4.7901/4.7960 from 4.7827/4.7862 at yesterday’s close, fell against the British pound to 5.4851/5.4918 from 5.4750/5.4790, and depreciated against the Japanese yen to 2.6039/2.6072 from 2.5896/2.5916.

The local currency traded mostly higher against Asean peers.

It strengthened versus the Thai baht to 13.0486/13.0705 from 13.0740/13.0895, appreciated against the Indonesian rupiah to 241.9/242.3 from 242.9/243.3 previously, and was up against the Philippine peso at 6.90/6.91 from 6.94/6.95, but weakened against the Singapore dollar to 3.1607/3.1648 from 3.1592/3.1618. - FMT