Ringgit Gains Ground Against Major Currencies Amid Shifting US Rate Outlook

The ringgit opened the Tuesday trading session higher against a basket of major currencies, though it remained largely unchanged against the US dollar. At 8:00 am, the local currency was quoted at 4.0585/4.0675 against the greenback, holding near Monday’s closing level of 4.0585/4.0630.

According to the original publisher, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that declining expectations for a US interest rate hike in September have provided a tailwind for emerging market currencies, including the ringgit. He highlighted that Malaysia currently occupies a favourable economic position, characterized by robust gross domestic product growth alongside well-contained inflation. Recent data indicated that both headline and core inflation moderated to 1.8% in July.

Beyond the US dollar, the ringgit demonstrated broad strength in early trading. The local note rose against the Japanese yen, reaching 2.5471/2.5529, and gained ground against the British pound to 5.4993/5.5115. Against the euro, the currency climbed to 4.7010/4.7114. Performance against regional peers was mixed; the ringgit strengthened against the Singapore dollar to 3.1772/3.1845 and edged up against the Thai baht to 12.2836/12.3175. It remained nearly flat against the Philippine peso.

Looking ahead, analysts anticipate the ringgit will oscillate between 4.06 and 4.08 against the US dollar throughout the day. For Malaysian businesses and consumers, these fluctuations are significant as they impact the cost of imports and the overall competitiveness of the nation's exports in the global market. As long as inflation remains low and GDP growth remains high, the local economy remains positioned to navigate shifting international monetary policies.