Ringgit Opens Higher Amid US Policy Uncertainty Weakening the Dollar
KUALA LUMPUR – The ringgit continued to strengthen against the US dollar at the opening on Friday, following the rapid shifts in US economic policy under the Donald Trump administration, which have created uncertainty within the business community and potentially dampened demand.
At 8 a.m., the ringgit rose to 4.4200/4400 against the US dollar from 4.4300/4340 at yesterday’s close.
Bank Muamalat Malaysia Bhd Chief Economist, Mohd Afzanizam Abdul Rashid, said the US Dollar Index (DXY) fell by 0.2 percent to 104.335 points, despite a strong economic performance in the US.
“The increasing policy uncertainty has reduced the visibility of how US monetary authorities will respond,” he told Bernama.
He said maintaining a moderately tight monetary policy stance remains the safest move to contain inflation risks.
Mohd Afzanizam added that the recent announcement by Second Finance Minister Datuk Seri Amir Hamzah Azizan regarding the fuel subsidy rationalisation mechanism for RON95 using MyKad in the second half of the year bodes well for the ringgit.
“This should be positive for the ringgit in the medium to long term, as it reflects the government’s commitment to fiscal reform.
“The ringgit is expected to hover around RM4.42 to RM4.43 today, with technical indicators showing a neutral zone for the USD-ringgit pair,” he said.
In early trading, the ringgit traded lower against most major currencies.
The local unit strengthened against the Japanese yen to 2.9297/9433 from 2.9351/9380 at yesterday’s close, but weakened against the euro to 4.7727/7943 from 4.7720/7763, and fell against the British pound to 5.7239/7498 from 5.7236/7287.
The ringgit also posted mixed performance against ASEAN currencies.
It was more stable against the Thai baht at 13.0615/1318 from 13.0678/0854 and rose against the Singapore dollar to 3.2997/3152 from 3.3060/3094.
However, it declined against the Philippine peso to 7.72/7.73 from 7.67/7.68 and weakened against the Indonesian rupiah to 266.8/268.1 from 267.4/267.8.
— BERNAMA
