The ringgit continued to defy regional trends this week, holding steady around 4.23 against the US dollar, even as other ASEAN-5 currencies weakened. Analysts attributed the resilience of the Malaysian currency to stronger-than-expected third-quarter GDP growth and improved investor sentiment toward Malaysia’s economic outlook.
According to market observers, the US dollar’s initial weakness—sparked by renewed worries over US regional banks and credit quality—was short-lived. Hawkish repricing along the Federal Reserve curve helped the greenback recover losses, with additional support coming from the euro’s decline following S&P’s downgrade of France’s sovereign rating to A+ from AA–, and a softer yen after Japan’s new Prime Minister Sanae Takaichi was appointed.
“The ringgit’s stability stands out in the region,” said one currency strategist. “Despite global headwinds, optimism surrounding Malaysia’s robust third-quarter economic performance is providing strong support.”
The USD also found strength as precious metal prices slumped and Washington announced fresh sanctions on Russia’s largest crude producers.
Focus on US CPI and Fed Policy
All eyes are now on the upcoming US September CPI report, expected to show a 0.3% month-on-month rise in core inflation—enough to confirm market expectations of a 25-basis-point Fed rate cut next week. Analysts noted that even if the data comes in slightly higher, it is unlikely to derail the Fed’s easing path, as policymakers have shifted their focus toward labour market conditions.
Attention next week will also turn to the Bank of Japan (BoJ) and European Central Bank (ECB) meetings. While the ECB meeting is expected to be uneventful, analysts say the BoJ could surprise markets with a rate move, depending on the yen’s weakness. “The new prime minister’s appointment suggests a possible delay to December, but persistent yen pressure could force an earlier adjustment,” one analyst noted.
Meanwhile, renewed US–China trade talks could lift sentiment toward emerging market assets, potentially benefiting the ringgit.
Outlook: Ringgit Seen Strengthening
Looking ahead, analysts forecast that the ringgit may appreciate toward 4.20/USD next week, supported by expectations of a Fed rate cut and potential weakness in the US dollar. However, they cautioned that the ongoing US government shutdown could inject short-term volatility and cloud labour market visibility.
On the technical front, the USD/MYR pair remains near its five-day EMA at 4.23, trading within a tight 4.22–4.23 range with a neutral bias.
“Malaysia’s currency continues to show relative resilience, anchored by domestic fundamentals and improving global risk sentiment,” analysts concluded.
