KUALA LUMPUR, El Sky news— The Malaysian ringgit regained ground this week, snapping a two-day losing streak against the US dollar and other major currencies as investor confidence improved amid signs of stronger economic momentum.
At the 6 pm close on Tuesday, the local currency strengthened to around RM3.9295/9360 per US dollar, up from RM3.9440/9500 at the previous Friday’s market close following a public holiday. This marked a notable rebound after a brief spell of downward pressure.
Manufacturing Sector Signals Expansion
Market sentiment was lifted by domestic data showing Malaysia’s manufacturing sector gaining traction. According to S&P Global, the Purchasing Managers’ Index (PMI) for manufacturing climbed to 50.2 in January 2026, the highest in 20 months and the third consecutive monthly improvement, indicating expansion in factory activity.
Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, said the improved PMI suggests that businesses are benefiting from lower input costs and firmer production trends. This helped reinforce optimism about Malaysia’s economic prospects and supported ringgit demand in foreign exchange markets.
Strength Against Major and Regional Currencies
In addition to gains against the US dollar, the ringgit also advanced against several major and regional currencies:
- Strengthened versus the Japanese yen, British pound and Euro.
- Firmed against ASEAN peers such as the Singapore dollar, Thai baht, Indonesian rupiah and Philippine peso.
External Factors Still at Play
Despite improving domestic indicators, the currency’s performance reflects a balancing act between local optimism and external pressures. Better-than-expected US economic data has sustained the strength of the US dollar, which can temper emerging market currencies. Nonetheless, the ringgit’s recent gains suggest investors are constructively pricing in Malaysia’s growth outlook.
Outlook and Market Implications
Analysts say the ringgit’s rebound may persist if domestic economic data continues to signal resilience and global risk sentiment stabilises. The uptick in manufacturing activity, in particular, is seen as a positive sign of broader momentum in Malaysia’s economy heading into 2026.
