Kuala lumpur: The ringgit strengthened to the 4.07 level against the US dollar at Friday's close, marking its strongest position in nearly six years. This development follows softer-than-expected US inflation data.

According to BERNAMA News Agency, at 6 pm, the local currency rose to 4.0740/0785 versus the greenback, from 4.0840/0880 at Thursday's close. The last time the ringgit was at this level was on January 15, 2020, when it closed at 4.0740 against the US dollar.

Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, commented on the situation, noting that the latest US consumer price index (CPI) reading suggests that the Federal Reserve (Fed) may consider cutting interest rates further in 2026. "If that happens, the gap between the Fed Funds Rate and the overnight policy rate would be narrowed," he told Bernama.

US inflation in November came in below expectations at 2.7 percent, compared with consensus estimates of 3.1 percent. Core inflation moderated to 2.6 percent from 3.0 percent in September.

Dr. Mohd Afzanizam also mentioned that the Bank of Japan raised its policy rate by 25 basis points to 0.75 percent, the highest in three decades. Despite this increase, the Japanese yen continues to weaken against the US dollar.

At the close, the ringgit traded mostly higher against a basket of major currencies. It edged up against the euro to 4.7715/7767 from 4.7869/7915 at Thursday's close, improved against the Japanese yen to 2.5909/5940 from 2.6188/6217, but fell against the British pound to 5.4514/4574 from 5.4513/4567.

The local currency also showed gains against ASEAN peers. It appreciated against the Singapore dollar to 3.1515/1553 from 3.1620/1653, advanced versus the Thai baht to 12.9428/9620 from 12.9750/9935, gained against the Philippine peso to 6.94/6.95 from 6.97/6.98, and edged up against the Indonesian rupiah to 243.2/243.6 from 244.2/244.5.