Kuala Lumpur: The ringgit retreated against the greenback on Tuesday despite the weaker US dollar index (DXY) and lower US Treasury yields following the recent credit rating downgrade of the United States by Moody’s Ratings. At 6 pm, the local currency eased to 4.2950/3010 against the greenback from the previous day’s close of 4.2870/2945.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid observed that the ringgit had risen to RM4.2873 during the afternoon session from Monday’s close of RM4.2908 before ending lower. He attributed the losses to profit-taking by some traders.

Dr. Mohd Afzanizam highlighted that the Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.85 percent, marking the first reduction since February due to increased uncertainties in the global economic outlook, particularly following US tariff shocks. This decision led to a 0.51 percent depreciation of the Aussie dollar against the US dollar, reflecting ongoing uncertainties that influence global monetary policy.

Additionally, Dr. Mohd Afzanizam mentioned the surprise growth in Malaysia’s exports, which increased by 16.4 percent, surpassing consensus estimates of 7.5 percent. Despite uncertainties, this trajectory suggests that Malaysia’s economy could potentially grow by more than four percent in the second quarter.

At the close, the ringgit traded mostly lower against a basket of major currencies. It slightly appreciated against the euro to 4.8340/8408 from 4.8344/8429 but depreciated against the Japanese yen to 2.9727/9773 from 2.9596/9650 and the British pound to 5.7428/7509 from 5.7420/7521.

The ringgit also weakened against its ASEAN peers, trading lower against the Philippine peso at 7.72/7.73 from 7.69/7.71, the Singapore dollar at 3.3153/3202 from 3.3135/3195, the Thai baht at 12.9856/13.0116 from 12.9630/9924, and the Indonesian rupiah at 261.6/262.1 from 260.8/261.4.