THE ringgit rose for the third straight day on Wednesday, reaching its highest level in three days against the US dollar, as weaker-than-expected US inflation figures weighed on the greenback and boosted hopes for interest rate cuts by the Federal Reserve.
The local currency opened at RM4.2115/2285 to the dollar, firming from Tuesday’s close of RM4.2290/2320. The US Dollar Index (DXY) declined 0.43% to 98.097 following the release of July’s consumer price data.
Bernama cited Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid saying the ringgit is likely to remain supported, with the US dollar-ringgit pair expected to trade within the RM4.20 to RM4.23 range in the near term.
“There is a high probability of a US interest rate cut,” he said. “The softer July inflation reading of 2.7% was largely driven by a moderation in the Owner’s Equivalent Rent (OER) to 4.1% after holding steady at 4.2% for two consecutive months.”
OER, which makes up roughly 25% of the Consumer Price Index (CPI), played a key role in dragging down headline inflation.
“The US benchmark equity indices rose more than 1%, while the yield on the two-year US Treasury note eased by four basis points to 3.73%,” Afzanizam added, noting that the cooling inflation figures have bolstered expectations for rate cuts and spurred a rally on Wall Street.
Against major currencies, the ringgit showed a mixed performance at the opening. It eased slightly against the Japanese yen to 2.8502/8619 from 2.8490/8512, and slipped to 4.9182/9380 versus the euro from 4.9090/9125. However, it edged up against the British pound to 5.6876/7106 from 5.6905/6946.
Among regional peers, the ringgit strengthened across the board. It improved to 3.2825/2960 against the Singapore dollar from 3.2867/2893, rose to 12.9965/13.0570 against the Thai baht from 13.0135/0300, advanced to 258.5/259.6 against the Indonesian rupiah from 259.6/259.9, and firmed to 7.38/7.41 against the Philippine peso from 7.41/7.42. - August 13, 2025
