THE Malaysian ringgit opened higher against the US dollar on Tuesday, as traders closely monitored developments regarding the United States upcoming tariff measures.
At 8 a.m., Bernama reported, the ringgit stood at 4.4500/4700 against the greenback, appreciating from 4.4640/4680 at the close of trading on Monday.
Dr. Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia Bhd, explained that the upward movement of the ringgit occurred as global markets reacted to concerns over the US's tariff plans.
The S&P 500 and Nasdaq experienced significant losses overnight, falling by 1.76% and 2.64% respectively, as the US prepared to impose higher tariffs on imports from Canada, Mexico, and China starting Tuesday.
"While the US ISM Manufacturing Index remained relatively stable at 50.3 points in February, compared to 50.9 in January, the New Orders sub-index saw a sharp decline to 48.6 from 55.1.
“This suggests that cooling demand could lead to lower production in the near future," Dr. Afzanizam told Bernama.
He also pointed out that the US dollar index dropped by 0.98%, falling to 106.557, as concerns about a slowing US economy raised expectations that the Federal Reserve may reduce interest rates to stabilise growth.
"Additionally, European leaders' backing for Ukraine regarding security guarantees has somewhat bolstered global risk sentiment," he added.
Despite its gains against the US dollar, the ringgit weakened against several major currencies.
The local currency slipped to 5.6528/6782 against the British pound, down from 5.6394/6444 at Monday’s close.
Similarly, it weakened to 4.6663/6872 versus the euro from 4.6586/6628 and edged lower against the Japanese yen, trading at 2.9786/9922 compared to 2.9683/9711.
In contrast, the ringgit strengthened against most ASEAN currencies. It appreciated to 3.3046/3200 against the Singapore dollar from 3.3130/3163, strengthened to 270.0/271.3 against the Indonesian rupiah from 270.8/271.2, and firmed to 7.68/7.72 against the Philippine peso from 7.71/7.72.
However, the ringgit experienced a slight dip against the Thai baht, falling to 13.0613/1339 from 13.0576/0762.
Looking ahead, Dr. Afzanizam suggested that the USD/MYR exchange rate could remain close to the immediate support level of 4.45 as markets continue to adjust to the evolving economic and geopolitical conditions.
In summary, the ringgit's performance today reflects global market uncertainties, influenced by developments in the US and European markets, as well as broader economic factors. – March 4, 2025
