KUALA LUMPUR: The ringgit edged up against the US dollar and other ASEAN currencies at Wednesday’s closing ahead of Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) decision tomorrow.
BNM’s Monetary Policy Committee (MPC) will hold its sixth and final policy meeting of 2026 on Nov 5.
At 6 pm, the local note rose to 4.0610/0660 against the greenback from Tuesday’s close of 4.0735/0775
According to reports, research firms expect BNM to maintain the OPR at 2.75 per cent tomorrow and throughout 2027, supported by resilient economic growth and a manageable inflation outlook.
It said headline inflation is expected to remain comfortably within BNM’s projected range of 1.5 to 2.5 per cent in the near term.
On the external front, SPI Asset Management managing partner Stephen Innes said the ringgit was on firmer footing following the Democratic Party's gains in the US Mid-Term Elections.
He said a Democratic sweep of US Congress could provide modest support for Asian currencies, including the ringgit, as increased political gridlock in Washington could reduce the likelihood of further US fiscal expansion, potentially weighing on US Treasury yields and the US dollar.
"However, for the ringgit to make more meaningful gains, we would probably need to see markets start pricing out some of the odds of a December US Federal Reserve (Fed) interest rate hike.
"The complication is that President Donald Trump's tariffs remain largely under presidential control, so the election result does not necessarily remove the inflation pressures that could prevent the Fed from shifting toward a more dovish stance. That may limit how far the US dollar can fall, at least initially,” he told Bernama.
Similarly, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market sentiment appeared to have improved following the US Mid-Term Elections result as the Trump administration could face greater legislative hurdles in passing new laws, although the US President retains veto powers.
"Consequently, the US Dollar Index (DXY) fell 0.46 per cent to 101.399 points. It is still too early to tell whether the elections result would see significant shift in US policies especially in relation to trade and the ongoing war in Iran.
"For now, markets are quite constructive which to some degree, may have resulted in improved risk appetite. Therefore, the ringgit was gaining by 0.20 per cent to RM4.06 today,” he said.
Against major currencies, the ringgit traded mostly lower.
The ringgit was higher against the Japanese yen to 2.5636/5669 from 2.5762/5789 at Tuesday’s close but inched down versus the euro to 4.5723/5779 from 4.5587/5631, and edged down vis-a-vis the British pound to 5.4783/4850 from 5.4658/4712 previously.
However, the ringgit strengthened against its ASEAN peers.
It gained against the Singapore dollar to 3.1771/1813 from the previous close of 3.1807/1841, rose versus the Thai baht to 12.0673/0868 from 12.0696/0858 yesterday, inched up against the rupiah to 223.5/223.8 from 224.3/224.6, and climbed vis-a-vis the Philippine peso to 6.39/6.40 from 6.42/6.43 previously. - Bernama
