Ringgit Surges to New 14-Month Peak as Weakening US Dollar Boosts Momentum

KUALA LUMPUR: The ringgit extended its upward momentum on Wednesday, closing at a fresh 14-month high against the US dollar as growing expectations of an imminent interest rate cut by the US Federal Reserve continued to weigh on the greenback.

At 6pm, the ringgit strengthened to 4.1200/1235 per US dollar, improving from Tuesday’s closing level of 4.1275/1330. This marks its strongest position since September 30, 2024, when it last touched 4.1210.

Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, said sentiment is being driven by increasing market confidence that the Federal Reserve will move ahead with a rate cut next week.

“Interest rate futures now reflect more than a 90% probability of a Fed rate cut. This narrows the rate differential between the Fed funds rate and Malaysia’s Overnight Policy Rate (OPR), making the ringgit more attractive,” he told Bernama.

Despite the strong performance against the US dollar, the ringgit closed lower against several major currencies. It slipped against the British pound to 5.4697/4744 from 5.4524/4597, weakened against the euro to 4.7982/8022 from 4.7920/7984, and edged down against the Japanese yen to 2.6476/6501 from 2.6463/6500.

Against regional ASEAN currencies, however, the ringgit mostly traded higher. It appreciated against the Singapore dollar to 3.1810/1839, rose against the Indonesian rupiah to 247.7/248.1, and strengthened against the Philippine peso to 6.99/7.00. The only exception was the Thai baht, against which the ringgit dipped slightly to 12.9024/9186.

Analysts expect the ringgit’s trajectory to remain tied to global monetary policy cues, especially upcoming signals from the Federal Reserve’s meeting next week.