THE ringgit weakened against the US dollar in early trade on Thursday, following the Federal Reserve’s decision to cut its benchmark interest rate by 25 basis points — the first such move since December 2024.
As at 8 am, the local currency stood at 4.1943/1988 against the greenback, compared with Wednesday’s close of 4.1860/1900.
Bernama reported Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid saying the market reaction reflected a bout of profit-taking across emerging market currencies after the US Dollar Index rose 0.25 per cent to 96.873 points.
"The US dollar-ringgit is likely to hover between RM4.19 and RM4.20 as the Fed has signalled that its rate cuts will be gradual," he said.
On Wednesday, the ringgit had strengthened by 0.35 per cent to close at RM4.1880 against the US dollar, before reversing gains as the Fed’s forward guidance weighed on market sentiment.
The US central bank, in its policy meeting overnight, announced a quarter-point cut and indicated that further reductions could follow before year-end, as part of a cautious strategy to support the slowing economy.
At the opening bell, the ringgit traded broadly lower against a basket of major currencies, with the exception of the Japanese yen. It firmed to 2.8522/8585 against the yen from 2.8607/8636 at Wednesday’s close.
However, it slipped against the British pound to 5.7156/7217 from 5.7131/7185, and was slightly weaker versus the euro at 4.9589/9642 compared to 4.9583/9631 previously.
Among regional currencies, the ringgit registered a mixed performance. It strengthened slightly against the Thai baht at 13.1826/2050 from 13.1892/2081, but fell to 3.2822/2860 versus the Singapore dollar from 3.2793/2827.
It also weakened against the Indonesian rupiah at 255.1/255.5 from 254.6/255.0, and eased to 7.37/7.38 against the Philippine peso, compared to 7.36/7.37 on Friday.
Market watchers are now closely monitoring the Fed’s policy path and global economic indicators, which are expected to influence short-term currency movements and capital flows into emerging markets. - September 18, 2025
