The ringgit rose against the US dollar on the first trading day of 2026, supported by expectations of further Federal Reserve interest rate cuts.
KUALA LUMPUR: The ringgit opened firmer against the US dollar on the first trading day of 2026, supported by a weaker greenback.
At 8 am, the local currency strengthened to 4.0540/0645 versus the US dollar from Wednesday’s close of 4.0580/0620.
Markets were closed on Thursday for the New Year’s Day holiday.
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The US dollar weakened on expectations of further interest rate cuts by the United States Federal Reserve in 2026.
Reports noted open pressure from US President Donald Trump for a more dovish central bank leadership has influenced these expectations.
Trump has publicly stated he wants the next Fed chairman to keep interest rates low and never “disagree” with the US president.
These remarks have heightened investor and policymaker concerns over the Fed’s independence.
IPPFA Sdn Bhd’s director of investment strategy and country economist, Mohd Sedek Jantan, said the ringgit’s strength aligned with regional currencies.
He said this was supported by a firmer Bloomberg Asia Dollar Index as broad-based Asian currency strength re-emerged.
Mohd Sedek noted the US Dollar Index declined by approximately 9.6% in 2025, reflecting a sustained easing in US dollar exceptionalism.
“With Asia’s macro outlook continuing to improve, most visibly through China’s Composite Purchasing Managers Index rising to a six-month high, the ringgit is well positioned to extend its strengthening trend into 2026 against the US dollar,” he told Bernama.
At the open, the ringgit traded mostly lower against a basket of major currencies.
It appreciated against the Japanese yen to 2.5864/5933 from 2.5907/5934 on Wednesday.
The local unit was slightly lower versus the British pound at 5.4624/4765 from 5.4531/4585.
It also eased against the euro to 4.7635/7758 from 4.7617/7664.
However, the ringgit was mostly higher against its ASEAN peers.
It rose against the Singapore dollar to 3.1541/1628 from 3.1550/1584.
The local note gained versus the Thai baht to 12.8291/8742 from 12.8560/8756.
It strengthened against the Indonesian rupiah at 242.9/243.6 from 243.2/243.6.
The ringgit was almost flat against the Philippine peso at 6.88/6.91 from 6.88/6.90. – Bernama
