Ringgit slips as dollar stays supported before Fed

The move matters because it shows how quickly shifts in global equity sentiment can feed into Asian currencies, even when domestic fundamentals are steady. Concerns that AI-related stocks have run ahead of themselves have begun to unsettle broader risk appetite, while falling US Treasury yields added to the defensive tone as investors bought government bonds.

Markets are also positioning ahead of next week’s Federal Open Market Committee statement and press conference, with traders expecting US rates to stay in a 3.75% to 4.00% range. That expectation has kept the dollar supported, even as the latest Treasury yield decline tempers some of the upward pressure on the US currency.

For investors in Malaysia, the immediate implication is that the ringgit remains vulnerable to swings in global technology valuations and US monetary-policy expectations, not just local data. A stronger dollar tends to weigh on emerging-market currencies and can complicate import costs and portfolio flows, while a steadier ringgit typically helps with inflation and foreign-currency liabilities.

Against other major currencies, the ringgit was mixed. It firmed versus the pound and euro, weakened against the yen, and was mostly stronger against ASEAN peers, suggesting the dollar move was the main driver rather than a broad loss of confidence in the Malaysian unit.

The next catalyst is the Fed, which could reset dollar direction and risk sentiment across Asia. Until then, traders are likely to keep one eye on AI stock volatility and another on US yield moves for clues on where the ringgit heads next.