Ringgit continues to improve ahead of Malaysia's 1Q GDP announcement

THE ringgit has continued its positive momentum, opening stronger against the US dollar this morning, ahead of Malaysia’s first quarter (1Q) 2025 gross domestic product (GDP) announcement today, an analyst said.

At 8 am, the local note appreciated to 4.2705/2920 versus the greenback from Thursday’s close of 4.2795/2870.

Bernama cited Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid saying markets are waiting for Malaysia’s 1Q 2025 GDP growth data, with advance estimates of a 4.4 per cent expansion.

He noted that the data will be a key factor in Bank Negara Malaysia’s (BNM) decision on whether to ease monetary policy, as well as the forecast for GDP growth this year.

“As such, we expect ringgit to trade more cautiously today," he told Bernama.

Meanwhile, Mohd Afzanizam noted that the US Dollar Index (DXY) was down by 0.16 per cent to 100.87 points, while the United States (US) Producer Price Index (PPI) continued to moderate to 2.4 per cent year-on-year in April after sustaining at 3.4 per cent in February and March.

This suggests that inflation in the US will continue to ease and create more room for the US Federal Reserve (Fed) to cut rates this year, he added.

"However, Fed chair Jerome Powell's speech at the Thomas Laubach Research Conference in Washington hinted that the inflation trend is likely to be more erratic due to the supply shocks, which have become more frequent and potentially more persistent.

"This could mean the Fed is not keen to ease its monetary policy stance in the near term, which would affect the ringgit," he said.

At the opening, the ringgit traded mostly higher against a basket of major currencies.

It was up against the British pound to 5.6819/7105 from 5.6862/6961 at Thursday’s close, and rose vis-a-vis the euro to 4.7800/8040 from 4.7939/8023 yesterday, but edged down versus the Japanese yen to 2.9338/9490 from 2.9326/9379 previously.

At the same time, the local note was traded mixed against its ASEAN peers.

It climbed versus the Singapore dollar to 3.2931/3102 from 3.2950/3010 yesterday and gained against the Philippine peso to 7.66/7.70 from 7.67/7.69 previously.

The ringgit had also strengthened against the Indonesian rupiah at 258.3/259.7 from 258.8/259.4 at the previous close, but fell against the Thai baht to 12.8630/9367 from 12.8198/8488 yesterday.