Ringgit opens higher ahead of Q2 GDP announcement

KUALA LUMPUR: The local currency, the ringgit, opened higher against major and Asean currencies ahead of Malaysia's second quarter GDP announcement for 2026, according to an economist. At 8 am, the ringgit rose to 4.0835/0895 against the US dollar from its previous close of 4.0850/0890. Malaysia's GDP growth for Q2 is expected to be around 5.8-5.9 percent, driven by stronger manufacturing and mining sectors, said Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.

If the actual number exceeds the estimate, it will be favorable for the ringgit. Dr Rashid also highlighted that the US Dollar Index (DXY) falling by 0.05 percent to 99.960 points, following a softer US producer price index, would decrease the likelihood of a September rate hike. July's PPI was at 4.7 percent compared to 5.0 percent, and the Core PPI moderated to 4.2 percent from 4.7 percent.

Weak US jobs data and moderate inflation suggest the Federal Reserve may keep the Fed Funds Rate steady during the Sept 15-17, 2026 meeting, which could be positive for the ringgit as the interest rate differential would stay unchanged. The ringgit was stronger against a basket of major currencies at the opening, rising against the Japanese yen, British pound, Singapore dollar, Thai baht, Philippine peso, and Indonesian rupiah.