Ringgit Closes Higher Against US Dollar Ahead of Malaysia’s Third-Quarter GDP Advance Estimate

KUALA LUMPUR: The ringgit closed higher against a weakening US dollar on Thursday as investors assessed market conditions ahead of tomorrow’s release of Malaysia’s advance estimate of gross domestic product (GDP) growth for the third quarter of 2026.

At 6pm, the ringgit strengthened to 4.0800/0835 against the US dollar from Wednesday’s close of 4.0805/0850.

Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said Malaysia’s GDP was projected to grow by approximately 5.2 per cent in the third quarter of 2026.

“Although this represents a moderation from the six per cent growth recorded in the previous quarter, the economy is expected to remain resilient, supported by domestic demand and sustained investment activities.

“More importantly, economic growth that continues to exceed its trend growth rate strengthens the case for further normalisation of the Overnight Policy Rate (OPR) towards 3.00 per cent, particularly as monetary policy settings need to remain aligned with the strength of economic fundamentals and evolving inflationary pressures,” he told Bernama.

Mohd Afzanizam said the US Dollar Index (DXY) unexpectedly weakened despite higher-than-anticipated inflation in the United States, with the Consumer Price Index (CPI) rising to 3.7 per cent in September from 3.4 per cent in August, exceeding the market consensus of 3.6 per cent.

He said that in the fixed-income market, the yield on the 10-year US Treasury fell by 10 basis points to 5.09 per cent, reflecting increased demand for safe-haven assets following a broad sell-off in technology stocks, particularly companies associated with artificial intelligence (AI).

“Concerns over excessive stock valuations and rising financing costs in the AI sector appear to have prompted investors to reassess US growth prospects.

“Meanwhile, cautious remarks from US Federal Reserve officials have tempered expectations of an imminent interest rate hike despite higher inflation readings, contributing to the weakness of the US dollar,” Mohd Afzanizam said.

At the close of trading, the ringgit traded mostly lower against a basket of major currencies.

The local currency weakened against the Japanese yen to 2.5869/5892 from Wednesday’s close of 2.5751/5781 and declined against the euro to 4.5761/5801 from 4.5673/5723.

However, it strengthened against the British pound to 5.4101/4147 from 5.4132/4192.

Against ASEAN currencies, the ringgit appreciated against the Indonesian rupiah to 227.4/227.7 from 227.9/228.2 and strengthened against the Philippine peso to 6.47/6.48 from 6.50/6.51.

The local currency also gained against the Singapore dollar to 3.1818/1848 from yesterday’s close of 3.1829/1267 but weakened against the Thai baht to 12.1758/1914 from 12.1498/1672.

BERNAMA