THE ringgit weakened slightly against the US dollar at the opening of trade on Wednesday, pressured by stronger-than-expected economic data from the United States and persistent geopolitical tensions in the Middle East that have bolstered demand for the greenback.
The local currency slipped to 3.9680/9725 against the US dollar at 8am, compared with 3.9625/9670 at last Friday's close, as traders returned to the market following a two-day holiday break for the King's Birthday and Wesak Day celebrations.
Market sentiment was shaped largely by evidence of continued resilience in the US economy, strengthening the case for the Federal Reserve to maintain its current monetary policy stance.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the ringgit had come under modest pressure as investors reacted to encouraging economic indicators from the United States.
"The US Dollar Index remained well supported as business sentiment improved in the US, with the manufacturing sector index rising to 54.0 points in May from 52.7 points in April, while job openings stood at 7.62 million in April, exceeding consensus estimates of 6.86 million.
"This suggests that the US economy remains resilient despite elevated fuel prices, which could mean that the US Federal Reserve may not be inclined to cut interest rates," Afzanizam told Bernama.
The stronger US economic outlook has reinforced expectations that borrowing costs in the world's largest economy could remain higher for longer, supporting the dollar and limiting gains among emerging market currencies, including the ringgit.
At the same time, investors remain alert to developments in the Gulf region, where concerns over disruptions to global energy supplies continue to influence currency markets.
Afzanizam noted that fears surrounding a possible closure of the Strait of Hormuz remained a significant source of uncertainty for investors.
"As such, the ringgit is expected to trade sideways as investors remain cautious," he added.
Despite losing ground against the US dollar, the Malaysian currency performed more strongly against most other major global currencies.
The ringgit appreciated against the British pound to 5.3378/3438 from 5.3447/3527 at the previous close. It also strengthened against the euro, rising to 4.6112/6164 from 4.6323/6392, while gaining against the Japanese yen at 2.4802/4831 compared with 2.4961/5000 previously.
The local currency also recorded gains against several regional peers, reflecting relatively stable investor confidence in Malaysia's economic outlook.
The ringgit advanced against the Singapore dollar to 3.0990/1028 from 3.1151/1201 and strengthened against the Thai baht to 12.1346/1546 from 12.2083/2338.
It was broadly unchanged against the Indonesian rupiah at 222.4/222.7 compared with 222.7/223.2 previously, while edging higher against the Philippine peso to 6.43/6.44 from 6.45/6.46.
Analysts expect currency markets to remain sensitive to upcoming US economic data, Federal Reserve policy signals and geopolitical developments in the Middle East, particularly those affecting energy markets and global trade routes. - June 3, 2026
