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THE ringgit started 2026 on a firmer footing against the US dollar, reflecting investor optimism over potential monetary easing in the United States and broader strength across regional currencies.
At 8am on Thursday, the local currency was quoted at 4.0540/0645 against the greenback, up from Wednesday’s close of 4.0580/0620. Markets were closed on New Year’s Day.
Reports suggest that the US Federal Reserve is widely expected to implement further interest rate cuts this year, amid public pressure from US President Donald Trump for a more dovish central bank stance.
Analysts have noted that the president has voiced a preference for a Fed chairman who keeps rates low and “never disagrees” with the White House, heightening investor concerns about the independence of the US central bank.
Mohd Sedek Jantan, director of investment strategy and country economist at IPPFA Sdn Bhd, said the ringgit’s strength was in line with regional peers, supported by a firmer Bloomberg Asia Dollar Index and renewed broad-based gains in Asian currencies.
“In 2025, the US Dollar Index declined by roughly 9.6 per cent, reflecting a continued easing in the dollar’s dominance,” he said.
“With Asia’s macroeconomic outlook improving, most notably through China’s Composite Purchasing Managers Index rising to a six-month high as both manufacturing and services returned to expansion, the ringgit is well positioned to extend its strengthening trend into 2026 against the US dollar.”
Meanwhile, the ringgit’s performance against other major currencies was mixed. It appreciated against the Japanese yen to 2.5864/5933 from 2.5907/5934 but eased slightly against the British pound to 5.4624/4765 from 5.4531/4585, and declined against the euro to 4.7635/7758 from 4.7617/7664.
Against regional ASEAN currencies, the ringgit fared mostly better. It rose versus the Singapore dollar to 3.1541/1628 from 3.1550/1584, strengthened against the Thai baht to 12.8291/8742 from 12.8560/8756, gained against the Indonesian rupiah to 242.9/243.6 from 243.2/243.6, and remained largely unchanged against the Philippine peso at 6.88/6.91. - January 2, 2026