The ringgit extended its upward trend on Tuesday, opening slightly higher against the US dollar as the greenback weakened ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes later in the day.
At 8am, the local currency strengthened to 4.0500/0670 against the US dollar, compared with Monday’s close of 4.0580/0625.
Market attention is largely focused on the FOMC minutes, with economic activity expected to remain subdued across most markets ahead of the New Year holiday. Investors continue to factor in the possibility of further US Federal Reserve interest rate cuts in 2026, following the 25-basis-point reduction announced at the December policy meeting.
IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the ringgit’s resilience is increasingly supported by domestic factors rather than external risk sentiment.
He noted that year-end liquidity is expected to remain thin, but underlying capital flows continue to favour the local currency.
“Export conversions, portfolio inflows and corporate hedging activities are supporting the ringgit, resulting in a steady supply of US dollars in the domestic market,” he said.
“As a result, any intraday strengthening of the US dollar is likely to be met by exporter selling and real-money demand for ringgit-denominated assets, keeping the US dollar-ringgit pair capped despite the quieter trading environment,” he told Bernama.
At the opening, the ringgit posted mixed performance against major currencies. It edged higher against the euro to 4.7677/7877 from 4.7787/7840 at Monday’s close, and strengthened slightly against the British pound to 5.4711/4941 from 5.4742/4803. However, it weakened against the Japanese yen to 2.5970/6082 from 2.5956/5987 previously.
Meanwhile, the ringgit gained ground against most ASEAN currencies. It rose versus the Singapore dollar to 3.1505/1642 from 3.1572/1610, strengthened against the Thai baht to 12.7910/8540 from 12.8985/9190, firmed against the Indonesian rupiah to 241.2/242.3 from 241.7/242.1, and improved against the Philippine peso to 6.88/6.92 from 6.90/6.91 previously.
