On a Friday morning in Kuala Lumpur, the ringgit edged a fraction stronger against the American dollar, extending a run of ten consecutive sessions in which the local currency has opened higher and reaching a level near a seven-week high. The movement is less a story about Malaysia than about the quiet expectations gathering around the world's most watched central bank: strong American growth and firmer inflation would ordinarily lift the dollar, yet the currency softened, suggesting that markets are beginning to imagine a future in which the Federal Reserve's tightening has run its course. Su
Ringgit Extends Rally to 10th Straight Session as Dollar Softens on Fed Policy Bets
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On a Friday morning in Kuala Lumpur, the ringgit edged a fraction stronger against the American dollar, extending a run of ten consecutive sessions in which the local currency has opened higher and reaching a level near a seven-week high. The movement is less a story about Malaysia than about the quiet expectations gathering around the world's most watched central bank: strong American growth and firmer inflation would ordinarily lift the dollar, yet the currency softened, suggesting that markets are beginning to imagine a future in which the Federal Reserve's tightening has run its course. Such readings are belief rather than certainty, and the ringgit's coming days will show whether that belief holds.
At eight in the morning in Kuala Lumpur, the ringgit opened at 4.0570 per US dollar, a touch stronger than Thursday's close. It was the tenth consecutive trading day on which the currency had opened higher against the greenback, a run that Bernama described as reflecting sustained positive sentiment. The local unit was sitting near a seven-week high, a reminder of how far it had climbed from its opening level in early September.
The puzzle lies in the data that accompanied the move. The US Dollar Index slipped 0.33 per cent to 101.854, even though American third-quarter GDP beat expectations and September's personal consumption inflation came in higher. Such figures would ordinarily strengthen the dollar, so their failure to do so caught attention.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, offered a reading of the moment. Bond markets had moved with the dollar, with the two-year Treasury yield dropping 10 basis points and the ten-year falling eight. He suggested that investors may be pricing in the chance that the Federal Reserve will change direction, since there is limited room for further tightening. He framed this as a belief, not a certainty, and expects the ringgit to hover between RM4.05 and RM4.07.
The strength was confined to the dollar. Against the British pound, euro and Japanese yen the ringgit weakened at the open, and its ASEAN peers told a mixed story. The day's trading will reveal whether the currency holds its range and whether the market's reading of the Fed survives the signals still to come.
At 8 am on Friday in Kuala Lumpur, the ringgit opened at 4.0570/0625 against the US dollar, a hair stronger than Thursday's close of 4.0575/0620. It was the tenth consecutive trading day that the currency has opened higher against the greenback, a run that Bernama described as reflecting sustained positive sentiment toward the local unit at the start of trading.
The ringgit was sitting near a seven-week high. The report places that in context by pointing back to an earlier opening level of 4.0560, recorded on Sept 9, 2026.
The explanation offered comes from Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd. He noted that the US Dollar Index fell 0.33 per cent to 101.854 points. What makes that notable, in his telling, is the data it came alongside: US gross domestic product growth for the third quarter of 2026 came in better than expected, and the personal consumption expenditure inflation rate for September was higher. Ordinarily, figures like those would be expected to support the dollar.
Bond markets moved in the same direction as the dollar index. The two-year US Treasury yield dropped 10 basis points to 4.60 per cent, and the 10-year yield fell eight basis points to 4.94 per cent.
From this, Mohd Afzanizam drew a conclusion he framed as a belief rather than a certainty: the market appears to be pricing in the possibility that the Federal Reserve might change its direction on monetary policy. With limited room for further tightening from the Fed, he told Bernama, the ringgit is likely to keep its positive trend in the near term. He expects the ringgit-dollar pair to hover between RM4.05 and RM4.07 today.
The strength was specific to the dollar pairing. Against other major currencies, the ringgit traded lower at the open. It weakened against the British pound to 5.4275/4348 from 5.4009/4069 at Thursday's close, and slipped against the euro to 4.5365/5427 from 4.5176/5226. Against the Japanese yen it edged down to 2.5707/5743 from 2.5685/5715.
Among its ASEAN neighbours, the picture was mixed. The ringgit was little changed against the Indonesian rupiah at 223.6/224.0, compared with 223.7/224.0 on Thursday, and flat against the Philippine peso at 6.35/6.36. It eased against the Singapore dollar to 3.1700/1746 from 3.1665/1702, and slipped against the Thai baht to 12.0279/0513 from 12.0165/0345.
The day's trading will show whether the ringgit stays inside the RM4.05 to RM4.07 range the economist expects, and whether the market's reading of the Fed holds up as more signals arrive.
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Economy & Finance