Ringgit Gains in Early Trade Amid US Pre-Election Jitters
Uncertainty Engulfs Markets
The ringgit traded slightly higher against the US dollar early Thursday, amid uncertainty over the upcoming US presidential election on November 5, according to an analyst.
Possible Near-Term Weakness Ahead
At 8:05 am, the local note stood at 4.3450/3615 against the greenback, compared with Wednesday’s close of 4.3490/3535. Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, opined that the ringgit may stay weak in the near term, with markets waiting for clarity until Americans cast their votes.
Risk Appetite Declines, Safe-Haven Currencies Gain
“The race between the candidates, Kamala Harris and Donald Trump, is neck-and-neck, leading to greater uncertainties—something financial markets tend to dislike. As a result, risk appetite has declined, increasing demand for safe-haven currencies such as the US dollar,” said Dr. Afzanizam. “Additionally, the interest rate outlook seems to favour the greenback, as the Federal Reserve (Fed) is unlikely to ease monetary policy soon.”
Considerations on Trade and Fiscal Policies
He also noted that concerns over trade protectionism and highly expansionary fiscal policies could affect inflation, potentially prompting the US Fed to reconsider its current monetary stance.
Mixed Performance Against Other Currencies
In early trading, the ringgit was higher against a basket of major currencies. It edged up against the Japanese yen to 2.8464/8574 from 2.8484/8516 at Wednesday’s close, rose against the euro to 4.6839/7017 from 4.6887/6935, and strengthened against the British pound to 5.6111/6324 from 5.6433/6491 yesterday.
ASEAN Currencies Marked
The ringgit also traded mostly higher versus ASEAN currencies. It was almost flat against the Philippine peso at 7.50/7.53 from 7.50/7.52 previously, rose against the Singapore dollar to 3.2847/2974 from 3.2932/2969, and gained against the Indonesian rupiah to 278.0/279.2 from 278.2/278.7. It also strengthened against the Thai baht to 12.8573/12.9138 from 12.8959/9149.
Conclusion
The ringgit’s early gains are likely a reflection of the uncertainty surrounding the US presidential election and the potential impact on global markets. As the vote approaches, investors may continue to seek safe-haven currencies, potentially maintaining the ringgit’s value against the US dollar.
FAQs
* What is the current value of the ringgit against the US dollar?
The ringgit is currently trading at 4.3450/3615 against the greenback.
* What is driving the ringgit’s value in early trade?
The uncertainty surrounding the US presidential election is contributing to the ringgit’s gains, as investors seek safe-haven currencies.
* How did the ringgit perform against other major currencies?
The ringgit edged up against the Japanese yen, rose against the euro, and strengthened against the British pound in early trading.
* How did the ringgit perform against ASEAN currencies?
The ringgit traded mostly higher versus ASEAN currencies, with some minor fluctuations.