Ringgit Closes Lower Ahead of US PCE Data

KUALA LUMPUR, Aug 16 — The ringgit ended lower against the US dollar today as investors turned cautious ahead of the release of the United States Personal Consumption Expenditures (PCE) price index, a key inflation gauge closely watched by the Federal Reserve.

Market Performance

At 6pm, the ringgit stood at RM4.47 per US dollar, weaker compared with RM4.45 yesterday. Market participants reduced exposure to riskier assets amid expectations that stronger-than-anticipated PCE data could reinforce the Fed’s hawkish monetary stance.

Traders noted that most Asian currencies traded mixed against the greenback, with the ringgit among the weaker performers due to its high sensitivity to US economic data.

Investor Sentiment

“Markets remain on edge as the PCE data is critical for assessing the Fed’s rate outlook. Any upside surprise could prolong the elevated interest rate environment, adding pressure on emerging market currencies,” said a senior FX strategist.

He added that the cautious mood was also amplified by subdued trading activity ahead of the upcoming weekend.

Regional & External Factors

• US Dollar Index (DXY) hovered near 104.3, reflecting sustained demand for the greenback.
• Oil prices remained steady above USD 81 per barrel, providing limited support to commodity-linked currencies.
• Regionally, the Thai baht and Indonesian rupiah held steady, while the Philippine peso weakened alongside the ringgit.

Outlook for Ringgit

Analysts expect the ringgit to trade in a cautious range of RM4.45 to RM4.50 against the dollar in the near term, with volatility likely to persist until after the release of the PCE data.

“In the medium term, external developments will remain the key driver. Domestically, Malaysia’s trade balance and upcoming corporate earnings season could also influence sentiment,” another analyst noted.