The ringgit opened stronger against the US dollar on Wednesday as investors looked ahead to Malaysia’s advance estimate for second quarter gross domestic product (GDP), with expectations that the economy maintained solid growth momentum, Bernama reported.
At 8am, the local currency strengthened to 4.0740/0780 against the greenback from Tuesday’s close of 4.0760/0800.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects Malaysia’s economy to expand by 5.1% in the second quarter, supported by resilient external demand, particularly from electrical and electronic exports as well as commodities.
“However, cautious consumer spending is expected to keep GDP growth in check. We have seen private consumption grow below its average over the past three quarters, and we believe the same trend will be replicated in the second quarter of 2026,” he told Bernama.
Malaysia is scheduled to release its advance estimate for second quarter GDP on Friday.
Mohd Afzanizam also said sentiment in the foreign exchange market was supported by softer than expected US inflation data for June, which reinforced expectations that the US Federal Reserve may refrain from tightening monetary policy in the near term.
“The main highlight was the US consumer price index (CPI), which recorded its largest monthly decline since May 2020. Driven by a sharp drop in petrol prices that lowered transport costs, the US CPI fell 0.4% month on month in June, steeper than the 0.1% decline expected by the consensus.
“The yields on the two-year and 10-year US Treasury notes fell eight basis points and four basis points to 4.18% and 4.58%, respectively,” he said, adding that the ringgit has room to strengthen further today.
He said the local currency could attempt to break through the RM4.05 level against the US dollar during the trading session.
Against a basket of major currencies, the ringgit traded mixed. It appreciated against the Japanese yen to 2.5117/5143 from 2.5131/5157 on Tuesday but weakened against the pound sterling to 5.4571/4625 from 5.4533/4586 and slipped against the euro to 4.6545/6591 from 4.6470/6516.
The ringgit also traded mixed against regional peers. It strengthened against the Indonesian rupiah to 225.1/225.5 from 225.3/225.6, eased against the Singapore dollar to 3.1562/1595 from 3.1533/1567 and weakened against the Thai baht to 12.1695/1873 from 12.1556/1722. It was unchanged against the Philippine peso at 6.60/6.61.
