Ringgit To Stay Resilient At 4.10 Levels Amid Strong Economic Data

The ringgit traded broadly unchanged against the US dollar this week, holding within the 4.07–4.08 range as softer US inflation data offset support for the greenback from escalating geopolitical tensions in the Middle East. According to Kenanga Research, the local currency briefly weakened after fresh US strikes on Iran and renewed concerns over potential disruptions in the Strait of Hormuz pushed oil prices higher and boosted demand for the US dollar as a defensive asset. However, the dollar’s gains were subsequently pared after both US Consumer Price Index (CPI) and Producer Price Index (PPI) readings came in softer than expected, easing concerns of further near-term Federal Reserve tightening. “The ringgit briefly weakened before stabilising around 4.07–4.08 per US dollar as softer US CPI and PPI data reduced immediate Fed tightening expectations, although hawkish risks have not been completely removed,” Kenanga said in a note. The research house noted that investors remained cautious, with geopolitical uncertainty continuing to support defensive positioning in the US dollar despite the improving inflation backdrop. Market attention has now shifted to Malaysia’s advance estimate for second-quarter 2026 gross domestic product (GDP), which Kenanga expects to show growth of 5.7% year-on-year, above the 5.2% consensus forecast. A stronger-than-expected reading would reinforce confidence in the resilience of Malaysia’s domestic economy and could provide support for the ringgit. Beyond the GDP release, the domestic economic calendar next week is relatively light, with trade data expected to be the main local data point. On the global front, Kenanga expects the European Central Bank’s policy decision and US weekly jobless claims data to have limited impact on currency markets, with developments in West Asia remaining the dominant driver of dollar sentiment. Kenanga’s base case assumes that geopolitical tensions remain elevated but do not escalate into a prolonged disruption of global energy supplies. Under this scenario, the ringgit is expected to continue tracking broader US dollar movements, with US monetary policy expectations remaining the primary determinant of currency direction. “Investors are likely to maintain defensive US dollar exposure until geopolitical risks ease and confidence in the disinflation trend strengthens,” the report said. The research house expects USD/MYR to trade within a 4.05–4.10 range in the near term, with risks skewed towards modest dollar strength should geopolitical tensions intensify further. From a technical perspective, Kenanga said USD/MYR remains range-bound. A decisive break above 4.08 could open the way towards 4.09, while 4.07 remains an important support level for the pair. The ringgit has remained relatively resilient despite heightened external volatility, supported by expectations of stronger domestic growth and a stable monetary policy backdrop from Bank Negara Malaysia.