Malaysian Ringgit Fluctuates Amid US Inflation and Iran Tensions

The Malaysian ringgit rose marginally against the US dollar on November 10, closing at 4.0540/0580. This initial gain followed a Deepavali replacement holiday and was driven by a decline in the US Dollar Index and falling Brent crude prices. Market sentiment improved after US President Donald Trump indicated that the war with Iran could end and that further military strikes were unnecessary.

Despite the gains against the greenback, the ringgit weakened against a basket of major currencies, including the Japanese yen, euro, and British pound, as well as several ASEAN peers. Bank Negara Malaysia supported currency stability by maintaining the Overnight Policy Rate at 2.75 percent.

By November 11, the ringgit remained flat against the US dollar, trading at 4.0540/0590. The currency faced new downward pressure after US Consumer Price Index data for October rose 0.4 percent, exceeding consensus estimates. This inflation spike strengthened the US Dollar Index to 102.233 points and pushed the two-year US Treasury note yield to 4.74 percent.

Federal Reserve officials responded to the data by suggesting potential monetary tightening. Governor Christopher Waller and Dallas Fed President Larrie Logan indicated that rate hikes of 25 to 50 basis points could occur during the December 8 and 9 meeting, further complicating the ringgit's trajectory.