Ringgit jumps 225 pips as US data cools Fed hike bets

The ringgit closed higher against major and regional currencies on Monday, 17 Aug 2026, as softer US economic data dampened expectations of a US Federal Reserve interest rate hike in September.

New Straits Times carried a report headlined “Ringgit closes higher as softer US data dampens Fed rate hike expectation”. At 6 pm, the ringgit strengthened 225 pips to 4.0585/0630 against the US dollar from last Friday's close of 4.0840/0885.

Contents

01

What drove the ringgit higher

02

The US data behind the shift

03

Gains against major currencies

04

Regional currencies also lagged the ringgit

What drove the ringgit higher

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam said the lower US consumer price index (CPI) and weaker jobs data last week appeared to ease expectations of a potential Fed rate hike in September.

Afzanizam said the odds of a September Fed rate hike had fallen to 30% from more than 50% a month earlier, which could support the ringgit in the immediate term.

The US data behind the shift

The US CPI was reported to have risen 0.1% in July, bringing annual inflation to 3.4%, while nonfarm payrolls fell by 23,000 in July against economists' forecasts for a gain of about 80,000 jobs.

The combination of softer inflation and weaker-than-expected hiring reduced the case for the Fed to tighten policy at its next meeting.

Gains against major currencies

At the close, the ringgit strengthened against the Japanese yen to 2.5496/5526 from 2.5660/5690, gained against the British pound to 5.5021/5082 from 5.5232/5293, and rose against the euro to 4.7062/7115 from 4.7182/7234.

Regional currencies also lagged the ringgit

The ringgit traded higher against regional currencies, edging up against the Philippine peso to 6.60/6.61 from 6.64/6.66, the Thai baht to 12.2948/3136 from 12.3153/3333, the Indonesian rupiah to 228.0/228.3 from 229.0/229.4, and the Singapore dollar to 3.1804/1842 from 3.1924/1964.