KUALA LUMPUR, 5 JANUARY 2026 — The Malaysian ringgit opened slightly weaker against the U.S. dollar on Monday as global risk aversion increased, prompting investors to reduce exposure to emerging-market assets and rotate into the greenback, which is widely regarded as a safe-haven currency.
At 8 am Malaysian time, the ringgit was quoted at 4.0580/0680 versus the U.S. dollar, slightly lower than its last Friday’s close of 4.0515/0560, reflecting cautious market sentiment at the start of the trading week.
Why the Ringgit Slipped
Economists say the weak open for the ringgit was driven by heightened risk aversion tied to geopolitical events, especially the recent U.S. military strike in Venezuela, which has unsettled markets and boosted demand for U.S. assets. Although the event does not alter Malaysia’s economic fundamentals, it reinforces near-term demand for the dollar, placing pressure on regional currencies including the ringgit.
Mohd Sedek Jantan, investment strategist and country economist at IPPFA Sdn Bhd, noted that such “risk-off” episodes typically see capital flowing into the dollar because of its liquidity and safe-haven status. At the same time, he pointed to the U.S. Federal Open Market Committee’s December minutes, which indicated that the U.S. Federal Reserve may hold policy steady and delay further rate cuts unless inflation continues to ease. This expectation of relatively higher U.S. yields has further supported the dollar and weighed on the ringgit.
Performance Against Other Currencies
The ringgit’s move was mirrored against other major and regional currencies:
- Japanese yen: weakened to 2.5845/5911 from 2.5817/5848
- British pound: slightly lower at 5.4527/4662 from 5.4509/4569
- Euro: eased to 4.7499/7616 from 4.7488/7540
- Singapore dollar: slightly weaker at 3.1506/1586
- Philippine peso: at 6.89/6.91, marginally softer
- Thai baht: firmed to 12.8662/9073
- Indonesian rupiah: flat at 242.6/243.3
Market Outlook
Despite the cautious start, some analysts remain optimistic about the ringgit’s trajectory. Recent commentary suggests that the currency has strengthened notably in 2025, closing the year on firmer footing after sustained gains against the U.S. dollar, a trend some economists expect could resume if regional fundamentals and interest rate differentials stabilise.
In the near term, the ringgit’s performance will likely continue to reflect global risk sentiment, U.S. monetary policy expectations and regional capital flows, especially as investors digest evolving geopolitical risks and macroeconomic data.
