THE ringgit opened marginally stronger against the US dollar on Thursday as concerns surrounding the long-term impact of US trade protectionism continued to weigh on sentiment towards the greenback, despite a fresh round of stronger-than-expected economic indicators from the world's largest economy.
The local currency advanced to 3.9935/0005 against the US dollar at 8am, compared with 3.9955/9990 at Wednesday’s close, reflecting cautious optimism among investors amid uncertainty over future US trade policies.
Market sentiment was shaped by a combination of robust American economic data and renewed concerns that higher tariffs and protectionist measures could increase business costs and place pressure on global trade flows.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index rose 0.30 per cent to 99.519 points, supported by evidence that the US economy continues to demonstrate resilience.
"While US economic data showed that the US economy remains strong, a business survey indicated that respondents are grappling with higher fuel costs and rising tariff rates," he told Bernama.
Recent data releases pointed to sustained momentum in the American economy. The Institute for Supply Management's services index climbed to 54.5 points in May from 53.6 points in April, while the ADP Employment Change report showed 122,000 jobs were created during the month, exceeding market expectations of 118,000.
Nevertheless, economists believe concerns over the broader implications of Washington’s trade agenda continue to cloud investor confidence.
"Following this, there are indications businesses might want to pass on the additional cost to the consumers. The latest announcement by the US trade representative suggests protectionist policies on international trade are here to stay, leading to a higher cost of doing business, which continues to dampen the sentiment," Afzanizam said.
The latest developments suggest financial markets are increasingly weighing the inflationary consequences of higher tariffs against the positive effects of stronger economic growth and employment figures.
Against other major currencies, the ringgit posted broad-based gains.
The local currency strengthened against the British pound to 5.3613/3707 from 5.3727/3775 previously. It also appreciated against the euro, rising to 4.6357/6438 from 4.6400/6440, while advancing against the Japanese yen to 2.4966/5011 from 2.5005/5027.
Performance against regional currencies was more mixed.
The ringgit improved against the Singapore dollar to 3.1121/1178 from 3.1164/1193 and edged slightly higher against the Indonesian rupiah at 222.2/222.7 compared with 222.3/222.7 previously.
It remained largely unchanged against the Philippine peso at 6.47/6.48, while weakening modestly against the Thai baht to 12.2051/2343 from 12.1825/1988 at the previous close.
The latest market movements underline the growing influence of trade policy developments on global currency markets, with investors increasingly assessing whether prolonged tariff measures could undermine international growth prospects even as the US economy continues to outperform expectations. - June 4, 2026
