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THE ringgit remained steady against the US dollar at the start of trading on Thursday, as regional currency markets reacted to the People’s Bank of China’s (PBoC) unexpected weakening of the yuan’s daily reference rate.
The local note held firm at 4.2120/2170 at 8am, unchanged from Wednesday’s close.
SPI Asset Management managing director Stephen Innes said the PBoC’s move to set the yuan weaker than market expectations came as a surprise to regional players, weighing on currencies including the ringgit.
"The move caught many regional players off guard, adding downside momentum on the ringgit,” he told Bernama. “With positioning heavily skewed toward short US dollar trades, the near-term outlook remains fragile, though any sharp moves are likely to be limited over the next 24 hours.”
Innes said attention has now shifted to the United States, with investors closely watching Friday’s personal consumption expenditure (PCE) inflation data and next week’s non-farm payrolls (NFP) figures to assess the Federal Reserve’s next steps on monetary policy.
"Until then, the ringgit is likely to remain under pressure, reflecting the Fed's pushback on dovish economic outlooks and a softer regional markets backdrop,” he added.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) remains elevated, rising 0.43 per cent to 97.687 points, as the Federal Reserve continues to signal caution over cutting interest rates.
He pointed to stronger-than-expected US housing data as a factor supporting the dollar. “New home sales in August jumped to 800,000 units, exceeding both the consensus forecast of 650,000 and July’s figure of 652,000,” he said.
“As such, the ringgit is likely to remain soft in the near term, hovering around RM4.21 and RM4.23,” Afzanizam added.
Despite being flat against the greenback, the ringgit made gains against several major and regional currencies at the opening.
It rose to 2.8310/8346 against the Japanese yen from 2.8400/8436, while also strengthening to 3.2687/2731 against the Singapore dollar and to 13.1109/1334 against the Thai baht.
However, the ringgit edged lower to 5.6647/6714 versus the British pound from 5.6761/6828 and slipped to 4.9453/9512 against the euro from 4.9567/9626.
It was unchanged against the Indonesian rupiah at 252.4/252.8 and steady at 7.33/7.34 against the Philippine peso. - September 25, 2025