Malaysian Ringgit Strengthens Amid Soft US Economic Data

The Malaysian ringgit strengthened against a basket of major and regional currencies between August 17 and 18, 2026. The currency initially opened higher on August 17 following the release of second quarter GDP growth of 6.0 per cent, trading at 4.0830/0890 against the US dollar.

By the close of trade on Monday, the ringgit jumped 225 pips to 4.0585/4.0630. This acceleration was driven by soft US economic data, including a July consumer price index rise of only 0.1% and a decline in nonfarm payrolls by 23,000. These figures reduced the probability of a US Federal Reserve interest rate hike in September from over 50% a month ago to 30%.

Mohd Afzanizam Rashid, Chief Economist of Bank Muamalat Malaysia Bhd, noted that shifted sentiments regarding the Fed Funds Rate provided immediate support to the ringgit. By Tuesday's opening trade, the currency remained stable against the US dollar at 4.0585/0675 while continuing to gain against the Japanese yen, British pound, and euro.

Domestic stability further supported the currency, as both headline and core inflation moderated to 1.8 per cent in July. Despite these gains, analysts noted that geopolitical risks continue to pressure crude oil prices, which has kept the ringgit within a relatively tight trading range.