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.
The Malaysian ringgit opened unchanged against the US dollar on Friday, maintaining a value of 4.0800/4.0845, according to market reports. This flat performance was influenced by external factors, such as the expectations of a restrictive US monetary policy, which balanced support from a weaker greenback. The US dollar index declined by 0.53%, reaching 102.005 points, as the Brent crude oil price dropped to approximately US$105 per barrel.
Despite this, persistent US inflationary concerns and the likelihood of the US Federal Reserve maintaining its tight monetary policy could hinder the ringgit's gains. Additionally, the International Energy Agency's decision to release 100 million barrels of oil from its reserves provided temporary relief to the oil market, although supply disruptions still persisted.
Concerns over valuation in AI-related stocks led to a flight-to-safety move, causing US Treasury yields to fall. The latest US Producer Price Index reading for September revealed that inflation remained elevated, rising by 6.3%, surpassing the expected 5.3%. This could indicate that the Federal Reserve might keep its restrictive stance at its upcoming Federal Open Market Committee meeting.
On the domestic front, analysts are closely watching Malaysia's advance estimate of the third quarter 2026 GDP, which is expected to be around 5.2%, although slower than the 6% growth seen in Q2 2026. Nonetheless, this growth is still considered decent as it remains above its trend level. This expectation of normalizing the overnight policy rate could provide support for the ringgit.
The ringgit showed mixed performance against major currencies, strengthening against the Japanese yen and euro, but weakening against the British pound. Its performance against ASEAN counterparts was mixed as well, being almost flat against the Indonesian rupiah, unchanged against the Philippine peso, and slightly lower against the Singapore dollar, while improving against the Thai baht.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
