Kuala Lumpur: The ringgit experienced a slight uptick against the US dollar on Tuesday, driven by cautious sentiment surrounding the ongoing trade negotiations between China and the United States. At the start of the trading day, the Malaysian currency advanced to 4.2275/2370 against the greenback, a modest improvement from Monday’s closing rate of 4.2290/2345.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, noted a 0.25 percent dip in the US dollar index (DXY) to 98.939 points, coinciding with continued trade discussions between the US and China. Positive signals from US officials about these negotiations have contributed to the ringgit’s performance. The economist pointed out that China’s trade figures with the US have shown a significant decline, with May’s exports and imports falling by 34.5 percent and 18.1 percent, respectively.
Dr Mohd Afzanizam further emphasized that these figures mark the second consecutive month of contraction, underscoring the substantial impact of tariff measures on global trade. Additionally, China’s consumer price index has registered a negative reading for the fourth straight month, with a year-on-year decrease of 0.1 percent in April, highlighting economic challenges amid weak demand.
He also observed that the USD/MYR exchange rate remained stable within a narrow range of RM4.231 to RM4.2458, reflecting cautious sentiment among market participants. This trend is anticipated to persist throughout the day.
In the early trading hours, the ringgit demonstrated strength against a selection of major currencies. It appreciated against the Japanese yen to 2.9242/9310 from the previous day’s 2.9344/2.9384, improved against the British pound to 5.7300/7428 from 5.7392/7466, and strengthened against the euro to 4.8303/8412 from 4.8316/8379.
The ringgit’s performance against ASEAN currencies was mixed. It gained against the Singapore dollar to 3.2876/2952 from 3.2908/2953, but weakened against the Thai baht to 12.9463/9846 from 12.9414/9642. Meanwhile, it remained nearly flat against the Indonesian rupiah at 259.4/260.1 compared to 259.5/260.0, and unchanged against the Philippine peso at 7.57/7.59.