Ringgit Opens Marginally Higher Amid Cautious Trading

Market Update

The ringgit opened marginally higher against the US dollar on Monday amid cautious trading ahead of the US government’s import tariff imposition on Canada and Mexico as well as China. At 8am, the ringgit improved to 4.4595/4.4650 versus the greenback from 4.4600/4.4650 at Friday’s close.

Market Insights

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid commented that the headline and core Personal Consumption Expenditures (PCE) inflation rates, which are the Federal Reserve’s (Fed) favourite inflation gauge, trended lower to 2.5% and 2.6%, respectively, in January 2025, suggesting that restrictive monetary policy is warranted to keep the risk of higher inflation at bay. “In addition, the Fed is expected to keep the rate steady until they are convinced that inflation rate will move towards the two per cent target,” he added.

Currency Performance

The ringgit was traded mostly lower against a basket of major currencies. It strengthened versus the Japanese yen to 2.9564/2.9605 from 2.9682/2.9717 at Friday’s close, but slipped against the British pound to 5.6185/5.6255 from 5.6174/5.6237 at the end of last week and fell vis-à-vis the euro to 4.6423/4.6481 from 4.6362/4.6414 previously.

In contrast, the local currency was traded mostly higher against Asean currencies. It appreciated against the Singapore dollar to 3.3036/3.3081 from 3.3069/3.3108 on Friday, rose vis-à-vis the Thai baht to 13.0242/13.0498 from 13.0455/13.0670 and improved versus Indonesian rupiah to 268.6/269.1 from 268.7/269.1. However, the ringgit was flat against the Philippine peso at 7.69/7.70.

Conclusion

The ringgit opened marginally higher against the US dollar on Monday amid cautious trading ahead of the US government’s import tariff imposition on Canada and Mexico as well as China. The market is expected to be volatile in the coming days, with the ringgit likely to experience fluctuations in response to global market trends and domestic economic factors.

FAQs

* What is the current exchange rate of the ringgit against the US dollar?
The ringgit is currently trading at 4.4595/4.4650 against the US dollar.
* What is the impact of the US government’s import tariff imposition on Canada and Mexico on the ringgit?
The ringgit is expected to experience fluctuations in response to the US government’s import tariff imposition on Canada and Mexico, which is scheduled to take effect on Tuesday.
* What is the current trend in the headline and core PCE inflation rates in the US?
The headline and core PCE inflation rates in the US have trended lower to 2.5% and 2.6%, respectively, in January 2025.