Kuala lumpur: The ringgit appreciated against the US dollar in early trade, tracking US dollar softness as markets price in uncertainty ahead of the August 1 tariff decision by the United States.
According to BERNAMA News Agency, at 8.01 am, the ringgit rose to 4.2230/2450 against the greenback, compared to Monday’s close of 4.2320/2365. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid expects the ringgit to maintain its positive performance. However, he noted that uncertainties over the US tariff would continue to affect market sentiments.
Mohd Afzanizam highlighted mixed and uncertain signals from US officials, with US Treasury Secretary Scott Bessent indicating that the Trump administration is more concerned with the quality of trade agreements than their timing. ‘The back and forth statements on the tariff plans would mean the scope for negotiation is widely open,’ he explained.
He further commented on Malaysia’s economic performance, stating that the Malaysian economy performed reasonably well in the first half of 2025. He believes that Bank Negara Malaysia’s preemptive move to cut the Overnight Policy Rate, along with an expansionary fiscal policy, should support Malaysia’s gross domestic product growth in the second half. Despite challenges, growth prospects for Malaysia are expected to remain resilient.
Meanwhile, SPI Asset Management managing partner Stephen Innes observed that the wider spread between the ringgit and the US dollar reflected two key factors, including heightened scrutiny on the Tokyo cash open following recent political developments, which could impact the yen if Japanese Government Bond yields respond. He also noted that thin seasonal liquidity across broader foreign exchange markets could amplify headline-driven swings.
Innes added that the ringgit is holding firm amid general US dollar weakness after Bessent called for a review of the US Federal Reserve, raising concerns about the US central bank’s independence. At the opening, the ringgit traded mostly easier against a basket of major currencies, though it trended mostly higher against most ASEAN currencies.