THE ringgit weathered renewed pressure from the strengthening US dollar on Thursday, remaining broadly firm against major global currencies despite fresh concerns that the United States Federal Reserve may delay interest rate cuts following an unexpected acceleration in inflation.
Currency markets were driven by the release of the latest United States Consumer Price Index data, which reinforced expectations that American policymakers could maintain a tighter monetary stance for longer than previously anticipated.
At the opening of trade, the Malaysian currency weakened marginally against the greenback, trading at 4.0685/0750 compared with Wednesday's closing level of 4.0670/0715.
However, the modest decline against the US dollar masked a stronger overall performance, with the ringgit advancing against most major international currencies and several regional counterparts.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said global investors were closely scrutinising the latest inflation figures from the United States, which have significantly altered expectations ahead of next week's Federal Reserve policy meeting.
"The statistical releases gave the impression that the Fed is likely to be more hawkish when the Federal Open Market Committee members hold their meeting next week.
"US Treasury yields continued to climb, with the 10-year yield rising to 4.55 per cent, suggesting that inflation risks are increasing," he told Bernama.
The latest data showed US consumer inflation accelerating to 4.2 per cent in May, its highest level since May 2023, adding to concerns that policymakers may need to maintain elevated borrowing costs to contain persistent price pressures.
The inflation reading prompted investors to push Treasury yields higher, reflecting expectations that interest rates could remain restrictive for an extended period.
Despite the shift in sentiment, Afzanizam noted that foreign exchange markets were likely to remain cautious until policymakers provide clearer guidance on the trajectory of future interest rates.
"However, foreign exchange markets are likely to remain cautious ahead of the Fed's response to the latest CPI data and how it would be reflected in its projections for the federal funds rate."
The ringgit's broader performance suggested that investors continue to view Malaysia's currency favourably despite external headwinds from the United States.
Against major currencies, the local unit strengthened against the Japanese yen, appreciated against the British pound and advanced against the euro, reflecting relative confidence in the ringgit amid heightened global market uncertainty.
The currency also performed well across much of the region.
It strengthened against the Singapore dollar and the Thai baht, while remaining largely stable against the Philippine peso. The only notable exception was a slight decline against the Indonesian rupiah.
The mixed but generally positive performance highlights the ringgit's ability to withstand global volatility even as financial markets increasingly price in the prospect of a more hawkish Federal Reserve.
With traders now focused on next week's Federal Open Market Committee meeting, attention will centre on whether policymakers signal further caution over inflation risks, a development that could determine the near-term direction of both the US dollar and emerging-market currencies, including the ringgit. - June 11, 2026
