KUALA LUMPUR: The ringgit closed higher against the weakening greenback on Thursday as investors assessed market conditions ahead of the release of Malaysia’s advance gross domestic product (GDP) estimates for the third quarter of 2026 (3Q 2026) tomorrow.
At 6 pm, the ringgit rose to 4.0800/0835 against the greenback from Wednesday’s close of 4.0805/0850.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Malaysia’s GDP for 3Q 2026 is projected to come in at around 5.2 per cent.
"Although moderating from six per cent in the preceding quarter, the economy is expected to remain resilient, supported by sustained domestic demand and investment activities.
"More importantly, the continued above-trend economic growth strengthens the case for further normalisation of the Overnight Policy Rate (OPR) towards 3.00 per cent, particularly as monetary policy settings should remain consistent with the economy's underlying strength and evolving inflationary pressures,” he told Bernama.
Mohd Afzanizam also said that the US Dollar Index (DXY) surprisingly declined despite higher-than-expected US inflation, with September's Consumer Price Index (CPI) rising to 3.7 per cent from 3.4 per cent in August, exceeding the market consensus of 3.6 per cent.
He said in the fixed-income market, the 10-year US Treasury yield fell by 10 basis points to 5.09 per cent, reflecting increased demand for safe-haven assets following the sell-off in technology stocks, particularly artificial intelligence (AI)-related companies.
"Concerns over stretched valuations and rising financing costs in the AI sector appear to have prompted investors to reassess US growth prospects.
"Meanwhile, cautious remarks from Federal Reserve officials have tempered expectations of an imminent interest rate hike despite the elevated inflation reading, contributing to the US dollar's weakness,” said Mohd Afzanizam.
At the close, the ringgit traded lower against a basket of major currencies.
It eased against the Japanese yen to 2.5869/5892 from 2.5751/5781 at Wednesday’s close, decreased against the euro to 4.5761/5801 from 4.5673/5723 and inched up against the British pound to 5.4101/4147 from 5.4132/4192.
Against its ASEAN peers, the local note gained against the Indonesian rupiah to 227.4/227.7 from 227.9/228.2 and edged up against the Philippine peso to 6.47/6.48 from 6.50/6.51.
It rose against the Singapore dollar to 3.1818/1848 from 3.1829/1267 at yesterday’s close, but was lower against the Thai baht at 12.1758/1914 from 12.1498/1672. - Bernama
