Ringgit outperforms major currencies after weaker US consumption data cools Fed hike bets

KUALA LUMPUR, June 26 — The ringgit has continued to strengthen against the US dollar, other major currencies and Asean peers on Friday, shrugging off the impact of stronger-than-expected United States (US) economic data.

At 6pm, the local note appreciated to 4.0860/0910 against the greenback from 4.1160/1200 at Thursday’s close.

SPI Asset Management managing partner Stephen Innes said the latest US economic data revealed a more uneven picture beneath the headline figures, with growth driven primarily by capital expenditure and government spending, while consumer spending was sharply lower.

“This has encouraged investors to trim aggressive US Federal Reserve (Fed) interest rate hike expectations, pulling US yields lower and taking pressure off Asian currencies, including the ringgit,” he told Bernama.

According to reports, the US recorded a better-than-expected gross domestic product (GDP) growth of 2.1 per cent in the first quarter of 2026 (1Q 2026), exceeding the consensus forecast of 1.6 per cent.

Meanwhile, the US personal consumption expenditures (PCE) inflation rate came in at 4.1 per cent in May, in line with market expectations.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the final estimate of US 1Q 2026 GDP revealed underlying weakness in the US economy, with consumer spending — the primary driver of growth — rising by only 0.5 per cent.

“This suggests that the main reason for higher inflation was mainly the higher cost of fuel. Therefore, raising the interest rate will not bring down the inflation,” he said.

At the close, the ringgit was stronger against a basket of major currencies.

It appreciated against the British pound to 5.4013/4079 from 5.4261/4314 at Thursday’s close, rose versus the euro to 4.6605/6662 from 4.6762/6807 yesterday, and was firmer vis-à-vis the Japanese yen at 2.5283/5316 from 2.5437/5464 previously.

The local note was also firmer against regional currencies.

It strengthened against the Singapore dollar to 3.1581/1625 from 3.1742/1775 at Thursday’s close, and increased versus the Thai baht to 12.2445/2643 from 12.3370/3538 previously.

The ringgit also advanced versus the Indonesian rupiah, rising to 227.9/228.3 from 229.4/229.7 yesterday and strengthened against the Philippine peso to 6.66/6.67 from 6.71/6.72 previously. — Bernama