Kuala Lumpur: The ringgit edged up slightly against the US dollar on Monday, as a weaker greenback, influenced by dovish sentiments from the United States Federal Reserve on interest rates and new trade developments related to China, supported the local currency, said an analyst. At 8 am, the local currency increased to 4.2520/2615 versus the greenback from last Friday’s close of 4.2560/2600.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid opined that the ringgit could remain positive in the near future as the US dollar is likely to stay weak, given the uncertainties over tariff policies and their potential impact on the US economy. He noted that the local currency has performed well against the greenback, appreciating to 4.2568 and gaining 1.39 percent on Friday.
Dr. Mohd Afzanizam highlighted that the special parliament session scheduled for today will also capture the market’s attention, as stakeholders anticipate plans to mitigate the impact o
f the tariff shocks initiated by the US President Donald Trump administration. Key areas of interest include potential revisions to the growth forecast and short-term measures to be announced by the government.
On the global front, the Trump administration has shown a willingness to reduce the tariff rate on China at some point in the future, following concerns over the decline in global trade. Dr. Mohd Afzanizam observed that the US labor market remains resilient amidst the tariff shocks, contributing to higher stock prices and bond yields last Friday. Despite these developments, the US Dollar Index (DXY) was not positively impacted, as it fell 0.05 percent to 99.984 points.
While the US nonfarm payrolls exceeded market estimates in April, the average monthly job creation pace has decreased to 133,000 in the first four months of 2025, compared to a monthly average of 176,000 during the same period last year. As a result, the Federal Open Market Committee meeting on May 6-7 will be closely monitored by trad
ers and investors to assess the Fed’s next move on benchmark interest rates. It has been reported that the Fed is still widely expected to cut rates in June, with traders anticipating over 100 basis points of easing by year-end.
Domestically, the ringgit traded higher against a range of major currencies and ASEAN peers. It rose against the Japanese yen to 2.9389/9459 from 2.9437/9467 at Friday’s close, strengthened against the euro to 4.8133/8240 from 4.8297/8342 previously, and improved against the British pound to 5.6424/6550 from 5.6639/6692. The local currency also appreciated against ASEAN currencies, trading stronger against the Singapore dollar at 3.2778/2857 compared to Friday’s close of 3.2862/2898 and gaining against the Thai baht to 12.8502/9011 from 12.8697/8903. Additionally, the ringgit inched up against the Philippine peso to 7.64/7.67 from 7.65/7.67 on Friday and showed a marginal increase against the Indonesian rupiah to 258.6/259.3 from 258.8/259.3.