Kuala Lumpur: The ringgit opened stronger for the third consecutive day against the greenback, supported by a decline in the US Dollar Index (DXY) as investors awaited further cues from the White House regarding developments in trade policy. At 8 am, the ringgit stood at 4.4660/4785 against the US dollar compared to yesterday’s closing rate of 4.4730/4780.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid reported that the DXY fell to 107.981 points, marking its lowest since December 27, 2024. He noted that the currency market would likely focus on the actions of the 47th United States President regarding import tariffs. President Trump has indicated that his administration is discussing a 10 percent import tariff on China due to concerns about fentanyl being sent from China to Mexico and Canada. This announcement has led to anxious markets as Trump has also targeted US neighbors, such as Canada and Mexico, for higher tariffs.
Dr. Afzanizam explained that while there is a risk-on mode in the equities market, US Treasury yields are trending lower. He suggested that Trump’s approach to import tariff hikes may be measured, which could have a positive effect on the ringgit. However, he cautioned that currency markets would remain cautious in the near term, with the dollar-ringgit expected to hover around 4.47 to 4.48.
Mohd Sedek Jantan, head of investment research at UOB Kay Hian Wealth Advisors, highlighted that even though the US dollar strengthened following Trump’s announcement of a 10 percent tariff on China, market uncertainty eased as expectations had been for a more substantial tariff. Despite this, currency volatility persists as markets await further guidance from the White House on trade policy. Jantan added that the ringgit has exhibited lower volatility compared to most other emerging market currencies, which is likely to attract increased investor demand for the currency in the near term.
At the market opening, the ringgit traded mostly lower against major currencies. It declined against the euro to 4.6478/6608 from Tuesday’s close of 4.6291/6343 and fell against the British pound to 5.5102/5256 from 5.4781/4842. However, it edged higher against the Japanese yen to 2.8682/8765 from 2.8691/8725.
The ringgit also traded mostly lower against ASEAN currencies. It weakened against the Thai baht to 13.1349/1810 from 13.1123/1347, fell against the Indonesian rupiah to 273.2/274.1 compared to 273.6/274.1, and edged lower against the Singapore dollar at 3.2969/3064 from 3.2899/2941. On the other hand, it rose against the Philippine peso to 7.63/7.66 versus Tuesday’s 7.65/7.66.