KUALA LUMPUR: The ringgit closed lower against the U.S. dollar ahead of the announcement of the United States Producer Price Index (PPI) data, amid concerns over trade wars, an analyst said.
At 6 PM, the ringgit weakened to 4.4310/4375 against the U.S. dollar from 4.4260/4300 at Wednesday’s close.
Bank Muamalat Malaysia Bhd’s Chief Economist, Dr. Mohd Afzanizam Abdul Rashid, said that investors will closely monitor the U.S. PPI data release tonight to determine whether it follows a similar trend to the February Consumer Price Index (CPI).
“Market participants remain cautious about the ongoing trade war and whether it could lead to a significant slowdown in the U.S. economy,” he told Bernama today.
Mohd Afzanizam noted that the USD/MYR exchange rate hovered around RM4.43 as the U.S. Dollar Index (DXY) rose 0.11% to 103.73 points.
“(The U.S. PPI data will determine) whether the Federal Reserve (Fed) will adopt a more dovish stance and lean towards an interest rate cut following the impact of trade tariffs next week. As a result, the ringgit is expected to remain weak against the U.S. dollar in the short term,” he said.
Meanwhile, SPI Asset Management Managing Partner Stephen Innes stated that the ringgit remained stable despite a downturn in regional equity markets caused by tariff concerns.
He noted that the local currency demonstrated resilience, even as broader currency markets adopted a defensive stance, with the U.S. dollar experiencing widespread demand.
“This resilience is somewhat surprising. However, there was a significant movement yesterday. As a result, traders are in a wait-and-see mode, preparing for potential retaliatory tariffs before making any bold moves,” he added.
Ringgit Performance Against Other Currencies
The ringgit traded mostly lower against a basket of major currencies.
Higher against the euro at 4.8205/8276 from 4.8301/8345 at Wednesday’s close.
Lower against the British pound at 5.7426/7510 from 5.7255/7306 previously.
Weaker against the Japanese yen at 2.9909/9953 from 2.9775/9804.
The local unit also depreciated against ASEAN currencies:
Down against the Singapore dollar at 3.3198/3250 from 3.3181/3213.
Lower against the Thai baht at 13.1199/1443 from 13.0688/0868.
Weaker against the Indonesian rupiah at 269.7/270.2 from 269.0/269.3.
Down against the Philippine peso at 7.72/7.74 from 7.71/7.73.
— BERNAMA
