Accra:The ringgit closed higher against the weakening US dollar on Thursday as investors evaluated market conditions before Malaysia's advance gross domestic product (GDP) estimates for the third quarter of 2026 are released.
According to BERNAMA News Agency, at 6 pm, the ringgit rose to 4.0800/0835 against the US dollar, compared to Wednesday's close of 4.0805/0850.
Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, projected Malaysia's GDP for the third quarter of 2026 to be around 5.2 percent. This represents a moderation from the previous quarter's six percent but indicates that the economy remains resilient due to sustained domestic demand and investment activities. He added that the continued above-trend economic growth supports further normalization of the Overnight Policy Rate (OPR) towards 3.00 percent, aligning with the economy's underlying strength and evolving inflationary pressures.
Dr. Mohd Afzanizam also noted the surprising decline of the US Dollar Index (DXY) despite higher-than-expected US inflation. The Consumer Price Index (CPI) for September rose to 3.7 percent from 3.4 percent in August, surpassing the market consensus of 3.6 percent. The 10-year US Treasury yield fell by 10 basis points to 5.09 percent, indicating increased demand for safe-haven assets following a sell-off in technology stocks, especially those related to artificial intelligence (AI).
Concerns about stretched valuations and rising financing costs in the AI sector seem to have led investors to reassess US growth prospects. Furthermore, cautious comments from Federal Reserve officials have tempered expectations of an imminent interest rate hike, despite elevated inflation, contributing to the US dollar's weakness.
At the close, the ringgit traded lower against a basket of major currencies. It eased against the Japanese yen, decreased against the euro, and inched up against the British pound. Against its ASEAN peers, the ringgit gained against the Indonesian rupiah and the Philippine peso, rose against the Singapore dollar, but was lower against the Thai baht.