Kuala Lumpur, 11 September 2025 – The ringgit opened firmer on Thursday, lifted by renewed expectations that the U.S. Federal Reserve will move to cut interest rates next week after fresh data showed signs of softening in the American economy.
At the start of trading, the local currency stood at RM4.2085/2300 against the U.S. dollar, compared with Wednesday’s close of RM4.2185/2220, marking a modest but notable gain that reflects cautious optimism ahead of the Fed’s crucial policy meeting.
According to Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, the weaker-than-expected U.S. Producer Price Index (PPI) provided the immediate catalyst for the ringgit’s rebound. The PPI rose just 2.6% in August, missing consensus forecasts of 3.3%, reinforcing the argument that inflationary pressures in the world’s largest economy are easing. “The latest figures strengthen the case for the Fed to deliver a rate cut next week,” Afzanizam said, adding that traders are now positioning themselves more cautiously.
Markets will, however, be closely watching the release of the U.S. Consumer Price Index (CPI) later tonight. Consensus estimates point to CPI edging higher to 2.9% in August, up from 2.7% in July. Any deviation from forecasts is likely to influence not just the dollar’s near-term trajectory but also the Fed’s deliberations. “The dollar-ringgit is expected to trade within a range of RM4.20 to RM4.22 today as traders weigh the inflation data against the upcoming Federal Open Market Committee (FOMC) meeting,” Afzanizam noted.
Broader Currency Moves
The ringgit’s advance was not limited to the U.S. dollar. It also gained ground against a basket of major currencies. It traded at RM2.8555/8703 against the Japanese yen, firmer than RM2.8614/8639 on Wednesday. Against the British pound, the local unit improved to RM5.6949/7240 from RM5.7127/7174, while it strengthened versus the euro to RM4.9244/9495 from RM4.9416/9457.
Within the region, the ringgit advanced against the Singapore dollar, settling at RM3.2820/2993 compared with RM3.2883/2912 previously. It also firmed against the Thai baht to RM13.2447/3199 from RM13.2699/2872. The ringgit, however, remained little changed against the Indonesian rupiah at RM255.5/256.9, and was steady against the Philippine peso at RM7.37/7.41, nearly unchanged from RM7.38/7.39.
Outlook Ahead of Fed
The ringgit’s performance underscores the degree to which global monetary expectations are now driving Asian currencies. A Fed rate cut would narrow the yield gap between U.S. and emerging-market assets, improving sentiment for currencies like the ringgit. However, with inflation risks still lingering and global growth momentum uneven, traders remain wary of sharp swings in the near term.
For now, the currency appears set to consolidate in a tight range as markets await definitive signals from both U.S. inflation data and the FOMC policy announcement next week.
