On a Wednesday morning in Kuala Lumpur, the ringgit began the day a touch firmer against the dollar, as the greenback softened and traders turned their attention to whether the world's two largest economies might soon raise interest rates. It is a small movement in a large conversation about money, growth, and the uneasy balance between taming inflation and sustaining prosperity. Analysts read the signals differently: some see a central bank bracing against rising prices, others see a brief adjustment that may fade once the tensions shaping oil prices recede.
Ringgit Opens Higher Against US Dollar as Fed and BOJ Rate-Hike Bets Build
An insurance hike rather than the start of a sustained tightening cycle
Mark
The ringgit gained on the dollar, but only slightly. Why is this worth noting?
Mimi
Because the gain is tied to two central banks. The dollar weakened while traders weighed possible hikes in the US and Japan, and the dates are close: the Fed on Sept 15-16, the BOJ on Sept 18.
Mark
What's the evidence for a Fed hike?
Mimi
Mohd Afzanizam points to Treasury bill auctions, with three-month bills at 3.80 per cent and six-month at 3.89 per cent.
Luke
That's one economist's reading of yields, though. Higher yields suggest a hike is possible, not that one is decided. The Fed hasn't said anything in this report.
Mark
And Japan?
Mimi
The data is stronger than forecast: GDP at 1.4 per cent against 1.1 expected, wages up 4.7 per cent against 3.9, inflation at 1.9 per cent. He thinks a 25 basis point rise could come on Sept 18.
Luke
Again, that's his expectation. The BOJ hasn't confirmed anything here, and the yen at 153.53 is described as reflecting expectations, not a decision.
Mark
Innes seems less excited about the Fed.
Mimi
He calls it an insurance hike, something that could be reversed quickly if West Asia tensions ease and oil returns to the mid-US$80s.
Luke
Worth noting that's his description of what investors think, not a forecast the Fed has endorsed. Also, the ringgit fell against the yen, euro and pound, so the strength is mainly against the dollar and most regional currencies.
Mark
So the story is more mixed than the headline.
Mimi
Yes. A modest dollar-side gain, with a lot riding on the next two weeks.
Der Puls
- The ringgit opened at 4.0560 per dollar, pulling ahead of Tuesday's 4.0605 as the greenback lost ground.
- Rising US Treasury yields have traders betting the Federal Reserve could lift its benchmark rate at its Sept 15-16 meeting.
- The yen strengthened to 153.53, with Japan's strong growth and wage gains fueling bets on a Bank of Japan hike around Sept 18.
- Against the euro, pound and yen the ringgit mostly slipped, while it gained on the baht, peso and rupiah.
- Strategists call the expected Fed move a short insurance hike, and its duration hinges on West Asia tensions and oil settling near the mid-US$80s.
On a Wednesday morning in Kuala Lumpur, the ringgit began the day a touch firmer against the dollar, as the greenback softened and traders turned their attention to whether the world's two largest economies might soon raise interest rates. It is a small movement in a large conversation about money, growth, and the uneasy balance between taming inflation and sustaining prosperity. Analysts read the signals differently: some see a central bank bracing against rising prices, others see a brief adjustment that may fade once the tensions shaping oil prices recede.
At 8 am in Kuala Lumpur on Wednesday, the ringgit was quoted at 4.0560 against the US dollar, a little firmer than the previous day's close. The greenback had weakened, and traders were weighing whether interest rates might rise in both the United States and Japan.
Bank Muamalat Malaysia's chief economist, Dr Mohd Afzanizam Abdul Rashid, pointed to climbing US Treasury yields as a sign the Federal Reserve could tighten at its meeting on Sept 15-16. In Japan, the yen had strengthened to 153.53, which he read as a sign the Bank of Japan may raise its policy rate on Sept 18. He cited solid second-quarter growth and wages rising faster than expected, with inflation at 1.9 per cent.
Stephen Innes of Quintex Intel offered a more measured view. He suggested currency markets see the Fed move as an insurance hike rather than the start of a long tightening cycle, one that could be reversed once West Asia tensions ease and oil returns to the mid-US$80s.
Against other majors, the ringgit mostly lost ground to the yen, euro and pound. Among regional currencies the picture was brighter, with gains against the baht, peso and rupiah, though it softened against the Singapore dollar. All eyes now turn to the Fed and Bank of Japan decisions, and to the oil and geopolitical currents that will decide how long any tightening lasts.
At 8 am on Wednesday in Kuala Lumpur, the ringgit was quoted at 4.0560/0635 against the US dollar, a little firmer than Tuesday's close of 4.0605/0640. The move came as the greenback weakened, and as traders weighed the chances of interest rate increases in both the United States and Japan.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid, speaking to Bernama, pointed to rising US Treasury yields as a sign the Federal Reserve could choose a higher benchmark rate when the Federal Open Market Committee meets on Sept 15-16. He cited the latest Treasury bill auctions, in which three-month bills yielded 3.80 per cent and six-month bills 3.89 per cent.
Japan was the second half of the story. The yen strengthened against the dollar to 153.53, which Mohd Afzanizam read as growing expectations that the Bank of Japan will raise its policy rate. He said a 25 basis point increase could come on Sept 18, given healthy growth alongside rising inflation, which stood at 1.9 per cent in July.
He backed that with two data points. Japan's gross domestic product for the second quarter of 2026 grew at an annualised 1.4 per cent quarter-on-quarter, ahead of the 1.1 per cent consensus estimate. Wage growth also accelerated to 4.7 per cent year-on-year in July, well above the 3.9 per cent the market had expected.
Stephen Innes, global strategist at Quintex Intel, offered a more cautious reading of the Fed. In his view, currency markets are treating an expected rate move largely as an insurance hike rather than the beginning of a sustained tightening cycle. Investors, he said, think it could be reversed fairly quickly once tensions in West Asia ease and oil settles back toward the mid-US$80s per barrel, a level that may increasingly be regarded as the new normal.
Against other major currencies, the ringgit mostly lost ground. It slipped against the yen to 2.6437/6488 from 2.6374/6398, fell against the euro to 4.7167/7254 from 4.7151/7191, and eased against the British pound to 5.4934/5036 from 5.4926/4974.
The picture among regional currencies was mostly better. The ringgit edged up against the Thai baht to 12.3241/3529 from 12.3285/3447, strengthened against the Philippine peso to 6.47/6.49 from 6.48/6.49, and rose against the Indonesian rupiah to 230.0/230.5 from 230.3/230.5. The exception was the Singapore dollar, against which it softened to 3.2081/2143 from 3.2073/2104.
The next markers are the Fed meeting on Sept 15-16 and the Bank of Japan decision on Sept 18, with West Asia tensions and the oil price shaping how long any tightening is expected to last.
Bemerkenswerte Zitate
Currency markets are treating an expected Fed move largely as an insurance hike rather than the start of a sustained tightening cycle.— Stephen Innes, global strategist, Quintex Intel
Higher US Treasury yields suggest the Fed could opt for a higher benchmark rate at its Sept 15-16 meeting.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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