Ringgit likely to trade higher from Monday (Jan 26), now aiming to breach the 4.00 once again

Kuala Lumpur – The Malaysian ringgit experienced significant gains against the US dollar this week, breaking through the 4.00 level to reach a more than seven-year high. The currency closed at 4.0045/0080 on Friday, a substantial increase from the 4.0555/0605 recorded the previous week.

Ringgit’s Recent Performance

On Friday, the ringgit touched 3.9992 against the US dollar, its strongest position since June 18, 2018, when it traded at 3.9960/9990. This surge reflects positive investor sentiment towards the local currency.

Did You Know? The ringgit’s recent high of 3.9992 against the US dollar represents its strongest level in over seven years.

Broader Currency Gains

The ringgit’s strength wasn’t limited to the US dollar. It also traded higher against a basket of major currencies, including the Japanese yen, euro, and British pound. Specifically, it strengthened against the yen to 2.5337/5361, appreciated versus the euro to 4.6993/7034, and appreciated vis-a-vis the British pound to 5.4177/4224.

Regional Performance

The Malaysian currency also performed well against its ASEAN peers. Gains were recorded against the Thai baht, Singapore dollar, Indonesian rupiah, and Philippine peso. The ringgit rose to 12.8362/8544 against the baht and 3.1302/1330 against the Singapore dollar.

Expert Insight: The ringgit’s broad-based appreciation suggests a growing confidence in the Malaysian economy and its currency, potentially driven by shifts in global investment strategies and relative economic performance.

Looking Ahead

Investors are now shifting their focus to the Federal Open Market Committee (FOMC) meeting scheduled for January 27-28. Dr. Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia Bhd noted that the Fed is likely to maintain its current interest rate, but its assessment of the economic condition will be crucial.

Kenanga Investment Bank Bhd anticipates the ringgit could trade in the 4.04-4.05 range next week, contingent on a hawkish outcome from the FOMC meeting, which would likely strengthen the US dollar index. The bank’s base case anticipates two cuts to US interest rates this year, potentially starting in the first half of 2026.

Frequently Asked Questions

What was the ringgit’s highest value against the US dollar this week?

The ringgit reached 3.9992 against the US dollar on Friday, its highest level in over seven years.

What is the significance of the FOMC meeting?

The FOMC meeting is important because the US Federal Reserve’s assessment of the economic condition could influence the value of the US dollar, which in turn affects the ringgit.

Against which currencies did the ringgit strengthen this week?

The ringgit strengthened against the US dollar, Japanese yen, euro, British pound, Thai baht, Singapore dollar, Indonesian rupiah, and Philippine peso.

How might global economic factors influence the ringgit’s trajectory in the coming months?