On a Tuesday morning in Kuala Lumpur, the ringgit edged firmer against the US dollar, a small movement that carries a larger pattern: a currency reacting, after a holiday pause, to a distant government shutdown, a rivalry between Washington and Beijing, and the possibility that the Federal Reserve will soon lower its rates. Economists read the shift as a ripple rather than a turning tide, since the ringgit had already been sold down more than its fundamentals warranted. Beneath the numbers lies an old human pattern of waiting, where traders hold their breath before a summit whose outcome nobod
Ringgit Opens Higher Against US Dollar as Shutdown and US-China Trade Tensions Weigh on Greenback
Perhaps the market is hoping for a better deal, but Trump is unpredictable
On a Tuesday morning in Kuala Lumpur, the ringgit edged firmer against the US dollar, a small movement that carries a larger pattern: a currency reacting, after a holiday pause, to a distant government shutdown, a rivalry between Washington and Beijing, and the possibility that the Federal Reserve will soon lower its rates. Economists read the shift as a ripple rather than a turning tide, since the ringgit had already been sold down more than its fundamentals warranted. Beneath the numbers lies an old human pattern of waiting, where traders hold their breath before a summit whose outcome nobody can predict.
At 8 am in Kuala Lumpur on Tuesday, the ringgit was quoted at 4.2165 against the US dollar, a little stronger than where it had closed the previous Friday. Trading had been paused on Monday for the Deepavali holiday, so this was the first chance in days for the currency to respond to events abroad.
Those events were a United States government shutdown and a continuing trade quarrel between Washington and Beijing. Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, told Bernama that these pressures weigh on the greenback even as the dollar index holds steady. Markets also see a 98.9 per cent chance of a quarter-point rate cut by the Federal Reserve, a move that would usually weaken the dollar, even though the shutdown has left traders short of official figures.
The ringgit's gains extended beyond the dollar. It strengthened against the pound, the euro and the yen, and was mostly firmer against regional currencies, with the Thai baht the notable exception. Technically, Dr Mohd Afzanizam argued, the ringgit had already been oversold, leaving room to rise, and he expected the dollar pair to stay between 4.21 and 4.22 through the day.
For now, caution rules. Investors are waiting on next week's meeting between Donald Trump and Xi Jinping, where China's refusal to buy American soybeans is hurting US farmers. Traders hope for a better deal, but Trump's unpredictability keeps them careful, and the ringgit's next steps will depend on whether it holds within that narrow range.
At 8 am in Kuala Lumpur on Tuesday, the ringgit was quoted at 4.2165/2300 against the US dollar, stronger than the 4.2240/2275 where it had closed last Friday. Trading had been shut on Monday, Oct 20, 2025, for the Deepavali holiday, so this was the first chance in days for the local currency to react to what had been happening abroad.
What had been happening abroad, according to Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, was a United States government shutdown and ongoing trade tensions between Washington and Beijing. He spoke to Bernama on Tuesday morning. In his reading, those pressures sit on the greenback even as the dollar index holds up. The DXY was hovering around 98.532 points, slightly below the previous close of 98.586.
On interest rates, he noted that the odds of a quarter-point cut by the US Federal Reserve remain fairly high, at 98.9 per cent, even though the shutdown has left the market short of official data. A cut would typically be read as a negative for the dollar.
He also pointed to the ringgit's own position. From a technical standpoint, he said, it was already oversold, which implies room to appreciate. On that basis he expected the US dollar-ringgit pair to move in a narrow band of 4.21 to 4.22 through the day.
The gains were broader than the dollar pairing. Against the British pound, the ringgit rose to 5.6522/6703 from 5.6741/6788 at Friday's close. It moved to 4.9110/9267 against the euro, from 4.9421/9462, and to 2.7966/8058 against the Japanese yen, from 2.8218/8244.
Among Southeast Asian currencies the picture was mostly positive but with one exception. The ringgit gained on the Singapore dollar at 3.2595/2702, from 3.2635/2665, and inched up against the Indonesian rupiah at 254.3/255.3, from 254.6/254.9. It was marginally higher against the Philippine peso at 7.25/7.27, from 7.26/7.27. It weakened against the Thai baht, which went to 12.9543/13.0030 from 12.9301/9471.
Looking ahead, Mohd Afzanizam said markets are in a cautious mood as investors watch next week's meeting between US president Donald Trump and Chinese President Xi Jinping. He said sentiment may be wary of the outcome, because China's decision not to buy American soyabeans is hurting US farmers. Markets may be hoping for a better deal, he said, but Trump is unpredictable, and that keeps traders careful.
The next markers are that Trump-Xi meeting and whether the ringgit holds within the 4.21 to 4.22 range he outlined for the day.
Citations marquantes
Perhaps the market is hoping for a better deal, but Trump is unpredictable. Hence, markets will be on the cautious mode.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
The ringgit was already in an oversold position from a technical standpoint, implying potential upside.— Dr Mohd Afzanizam Abdul Rashid (paraphrased)
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