The ringgit experienced a positive surge against various currencies following the US Federal Open Market Committee's (FOMC) dovish stance on inflation. On Thursday, the Malaysian currency edged up against the Singapore dollar to 3.3248/3330 from 3.3251/3306 at the previous close and strengthened against the Thai baht to 13.1622/2002 from 13.1778/2056. The FOMC's decision to maintain interest rates and slow the pace of its balance sheet runoff signaled a dovish tilt by the US Federal Reserve.
The ringgit also advanced against the Indonesian rupiah, trading at 267.3/268.1 compared to 268.1/268.7 previously, and saw a slight increase against the Philippine peso, moving to 7.71/7.74 from 7.74/7.75. The FOMC's unchanged interest rates and reduced balance sheet runoff from US$25 billion to US$5 billion provided a boost to the Malaysian currency.
"It also gives traders and investors time to reassess the current pessimism, as the Fed’s steady approach supports risk appetite," stated Dr. Mohd Afzanizam Abdul Rashid.
In contrast, the ringgit weakened against certain currencies such as the British pound, dropping to 5.7504/7641 from 5.7496/7587, and against the Japanese yen, decreasing to 2.9774/9847 from 2.9595/9643. Despite these declines, the ringgit rose against the euro to 4.8231/8346 from Wednesday’s close of 4.8324/8400 and advanced against the greenback to 4.4200/4305 from 4.4330/4400.
The FOMC's decision was viewed positively for the ringgit, reflecting the Fed's confidence in the resilience of the US economy amid uncertainty. The committee's cautious approach was seen as a stabilizing factor for global markets.
"During the press conference, Fed Chair Jerome Powell indicated that tariff-driven inflation is likely to be transitory. He also acknowledged rising recession risks but said they were not at an alarming level," noted Dr. Mohd Afzanizam Abdul Rashid.
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