Kuala Lumpur, 18 June 2026 – The ringgit opened easier against the US dollar on Thursday as investors turned cautious after the US Federal Reserve signalled a more hawkish policy outlook, strengthening the greenback and pushing US Treasury yields higher.
At 8am, the local currency weakened to 4.0730/0820 against the US dollar from Tuesday’s close of 4.0665/0700. The domestic market was closed on Wednesday for the Awal Muharram public holiday.
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The softer opening reflected renewed pressure on Asian currencies after the Federal Open Market Committee indicated that price stability remained its main priority. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index rose 0.85% to 100.382 points after the Fed’s latest projections suggested the possibility of a 25-basis-point rate increase this year.
Two-year US Treasury yields also climbed 13 basis points to 4.18%, reinforcing the view that US interest-rate expectations remain a major driver of foreign-exchange markets. Higher US yields tend to support the dollar because they make US assets more attractive to global investors, especially when markets are cautious.
For the ringgit, this creates near-term pressure despite Malaysia’s relatively steady macroeconomic backdrop. When the US dollar strengthens, emerging-market and regional currencies often face selling pressure, even if domestic fundamentals remain intact.
The latest movement also shows how quickly currency sentiment can shift. Earlier in the week, the ringgit had benefited from improved market sentiment after reports of an interim US-Iran agreement and expectations that the Strait of Hormuz could reopen. That development weighed on crude oil prices and helped reduce fears of energy-driven inflation.
However, the Fed’s hawkish signal has now become the dominant driver. WTI crude was trading around US$76.06 per barrel, while Brent crude stood at US$79.55. Lower oil prices may support broader risk sentiment and ease inflation concerns, but they were not enough to offset the stronger US dollar at the opening.
The ringgit’s broader performance was more mixed. Against major currencies, it was mostly firmer. It was almost unchanged against the Japanese yen at 2.5360/5417 from 2.5360/5384, strengthened against the British pound to 5.4175/4295 from 5.4552/4599, and appreciated against the euro to 4.6868/6972 from 4.7175/7216.
Against regional peers, the local note showed a mixed pattern. It rose against the Thai baht to 12.4518/4870 from 12.5027/5192 and strengthened against the Singapore dollar to 3.1623/1695 from 3.1722/1752. However, it was little changed against the Indonesian rupiah at 229.3/229.9 and the Philippine peso at 6.74/6.76.
For Malaysian businesses and investors, the ringgit’s movement against the US dollar remains important because it affects import costs, overseas financing, commodity pricing and investor sentiment. A softer ringgit can raise the cost of dollar-denominated imports, but it may also support exporters that earn revenue in foreign currencies.
The currency’s performance also matters for foreign investors in Malaysian equities and bonds. If the US dollar remains firm and US yields stay elevated, regional currencies may continue facing pressure, making foreign fund flows more selective.
Still, the ringgit’s firmer performance against the pound, euro and Singapore dollar suggests the weakness was not broad-based. Instead, the immediate pressure came mainly from renewed US dollar strength after the Fed’s latest policy messaging.
The next few sessions will likely depend on whether investors continue pricing in a more hawkish Fed path. If US yields remain high, the ringgit may stay under pressure against the greenback. But if lower oil prices and easing geopolitical concerns continue improving broader market sentiment, the local note may find support against other currencies.
The Ledger Asia Insights
The ringgit’s softer opening against the US dollar shows that the Federal Reserve remains the most powerful driver of short-term currency sentiment. Even when oil prices fall and geopolitical risks ease, a stronger dollar and higher US yields can still weigh on Asian currencies.
For Malaysian investors, the key issue is whether this is a temporary dollar-driven adjustment or the start of a more sustained pressure cycle. The ringgit’s firmer tone against several major and regional currencies suggests that Malaysia’s currency is not weakening uniformly, but the US dollar remains difficult to challenge when Fed expectations turn hawkish.
The broader takeaway is that currency markets are now balancing two forces: lower oil-driven inflation pressure on one side, and tighter US monetary expectations on the other. If the Fed stays hawkish, the ringgit may remain defensive against the dollar. If global sentiment improves and US yields stabilise, Malaysia’s currency could regain some near-term footing.
