KUALA LUMPUR (Bernama): The ringgit is expected to trade within the 4.10-4.15 range against the US dollar from Monday (Nov 17), supported by Malaysia’s resilient macroeconomic fundamentals amid shifting expectations over the United States’ monetary policy.
In a note released to the media, Kenanga Investment Bank Bhd stated that the market has significantly decreased the likelihood of a December interest rate cut by the US Federal Reserve (Fed).
Just a month ago, the odds were over 90 per cent, but following the recent Federal Open Market Committee (FOMC) meeting, they dropped to about 70 per cent and are now considered to be "roughly a coin toss”.
It said the uncertainty stems from the Fed’s own acknowledgement that it is "flying blind” due to outdated inflation data, which has made policymakers more cautious.
"However, we still expect a December cut, followed by two more in 2026, as labour-market softness becomes harder to ignore, though stagflation risks make a Fed pause plausible,” the research house said.
Kenanga IB stated that despite uncertainty in policy, the US economic fundamentals seem soft enough for the dollar to decline, which helps to support the stability of the ringgit in the near term.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit’s near approach to a four-year high reflected a constructive outlook among traders and investors towards the Malaysian economy.
"I sense that market participants remain positive on Malaysia’s prospects. The third-quarter 2025 gross domestic product (GDP) came in at 5.2 per cent, in line with the advance estimate.
"Monetary policy is likely to stay supportive of growth, and at this juncture, the Overnight Policy Rate (OPR) could remain at 2.75 per cent in 2026,” he told Bernama.
Mohd Afzanizam also said that the ongoing fiscal consolidation should also be credit-positive, which may attract more foreign inflows into government bonds.
"Overall, the ringgit appears on track to maintain its positive trajectory,” he said.
On a weekly basis, the ringgit firmed against the greenback, closing higher at 4.1290/1345 compared with 4.1735/1775 last week.
The local note traded higher against a basket of major currencies.
It gained against the British pound at 5.4313/4385 from 5.4660/4713, strengthened versus the euro to 4.7983/8047 from 4.8154/8200, and enhanced against the yen at 2.6690/6728 from 2.7192/7220 at last week’s close.
The ringgit also trended higher against its ASEAN peers.
It rose against the Singapore dollar to 3.1720/1765 from 3.2015/2048, gained versus the Indonesian rupiah at 247.1/247.5 from 250.0/250.4, appreciated against the Philippine peso to 6.99/7.00 from 7.07/7.08 and strengthened against the Thai baht to 12.7356/7580 from 12.8999/9174 previously. - Bernama
