Ringgit Rises as US Dollar Weakens on Cautious Sentiment
Market Insights
The ringgit rose against the US dollar in early trade as investors remained cautious about the policies of US President Donald Trump’s administration, particularly on tariffs and geopolitics, according to an analyst.
At 8am, the ringgit strengthened to 4.4040/4310 from 4.4270/4320 at Thursday’s close.
Economic Factors
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the greenback weakened amid a decline in US treasury yields and falling equity prices, as investors assessed corporate earnings.
“The latest earnings report from Walmart, a key US retailer, highlighted that uncertainties in consumer behavior, global economic conditions, and geopolitics are expected to affect its financial performance this year,” he told Bernama today.
Global Economic Trends
Afzanizam noted that US retail sales fell 0.9% month-on-month in January, reinforcing concerns over economic uncertainty. He added that the US dollar index stood at 106.372 points, after previously surpassing 107.
“A weaker economic outlook should normally be followed by the anticipation of monetary easing by the central bank,” he said. “However, such an argument is at odds with indications from the US Federal Reserve, as it is not in a rush to reduce the federal funds rate,” he added.
Currency Performance
The ringgit traded mostly higher against major currencies. It strengthened against the Japanese yen to 2.9435/9619 from 2.9454/9490 and gained against the British pound to 5.5794/6136 from 5.5833/5896. However, it slipped against the euro to 4.6238/6521 from 4.6196/6248.
The ringgit also rose against most Asean currencies. It appreciated against the Singapore dollar to 3.3023/3228 from 3.3060/3099 and the Thai baht to 13.1232/2146 from 13.1459/1685. The local note also advanced against the Indonesian rupiah to 269.5/271.3 from 270.9/271.4 and the Philippine peso to 7.60/7.65 from 7.64/7.65 on Thursday.
Conclusion
The ringgit’s rise against the US dollar can be attributed to the cautious sentiment surrounding the US economy, particularly with regards to tariffs and geopolitics. As investors assess the impact of these factors, the ringgit is expected to remain strong against major currencies.
FAQs
* Why did the ringgit rise against the US dollar?
+ The ringgit rose against the US dollar due to cautious sentiment surrounding the US economy, particularly with regards to tariffs and geopolitics.
* What are the current market trends?
+ The ringgit traded mostly higher against major currencies, with some minor fluctuations.
* What is the current state of the US economy?
+ The US economy is experiencing uncertainty, with retail sales falling 0.9% month-on-month in January and the US dollar index standing at 106.372 points.