KUALA LUMPUR: The ringgit extended yesterday’s losses to close lower against the greenback on Tuesday, as the global economic outlook prompted investors to shift interest towards safe haven currencies, an analyst said. At 6 pm, the local currency edged down to 4.4675/4720 against the US dollar, compared to Monday’s close of 4.4570/4625.
According to BERNAMA News Agency, SPI Asset Management managing director Stephen Innes highlighted that the BRICS tariff threat continues to overshadow regional markets. This is particularly evident as the Chinese yuan exerts downward pressure on regional currencies. Innes noted that the ominous drop in Chinese bond yields indicates market anticipation of deeper rate cuts by China to support its weakening economy. This situation has resulted in a widening interest rate differential between the US and China. Consequently, not only is the yuan declining, but it is also affecting the ASEAN currency basket.
Amidst the financial uncertainties, Innes pointed out that Donald Trump’
s unpredictable social media posts contribute to a sense of tension and caution among traders, especially in Malaysia. This has left those betting against the US dollar in a particularly vulnerable position. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid added that market sentiments remain uneasy about Trump’s recent remarks on tariffs as his inauguration on January 20, 2025, approaches.
Dr Mohd Afzanizam mentioned that the upcoming Federal Open Market Committee (FOMC) meeting on December 17 and 18 could provide more insights into how the US Federal Reserve perceives the economy. The meeting will include the latest macroeconomic forecast, particularly prospects for the Fed Fund Rate in 2025.
The ringgit also traded lower against a basket of major currencies. It weakened against the British pound to 5.6643/6700 from 5.6613/6683, depreciated against the euro to 4.7003/7050 from 4.6856/6914, and eased against the Japanese yen to 2.9825/9859 from 2.9648/9687 at Monday’s close.
The lo
cal unit traded mostly lower against ASEAN currencies, falling against the Singapore dollar to 3.3223/3261 from 3.3113/3156, remaining almost flat against the Indonesian rupiah at 280.1/280.5, and declining against the Thai baht to 12.9854/13.0042 from 12.9196/9423. The ringgit also dipped against the Philippine peso to 7.62/7.63 from 7.59/7.61.