Ringgit opens higher as expected BNM rate hike, improved global sentiment lift local currency

KUALA LUMPUR, Nov 5 - The Malaysian ringgit started the day on a bullish note against the US dollar and other major currencies, ahead of the Bank Negara Malaysia's (BNM) Overnight Policy Rate (OPR) decision. Investors were expecting a rate hike from BNM, which is set to finalize its monetary policy for 2026 today. The ringgit strengthened to 4.0585/0660 against the US dollar, up from yesterday's close of 4.0610/0660.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid expects the central bank to raise the OPR by 25 basis points in its final meeting of the year, as economic growth continues to outperform targets. Improved global sentiment following the US midterm elections also played a role in the ringgit's positive performance, with markets showing signs of optimism.

Brent crude oil prices fell by 8.62% to US$94.67 per barrel, while the yield on the 10-year US Treasury note decreased by eight basis points to 4.89%. Financial markets responded positively, with the S&P 500 up by 1.58% to 7,688.62 points and the US Dollar Index falling by 0.33% to 101.528 points. The ringgit's gains could potentially push the ringgit-US dollar pair to test the RM4.05 level.

Against major currencies, the ringgit showed strength, strengthening against the Japanese yen, euro, and British pound. However, the ringgit faced mixed performance against its ASEAN peers, with a few exceptions.