Ringgit closes lower as investors seek safe-haven currencies

 

KUALA LUMPUR: 

The ringgit closed marginally lower against the greenback in the first trading day of December as investors shifted their interest towards safe-haven currencies, including the US dollar, an analyst said.

SPI Asset Management managing director Stephen Innes said the US dollar started the week on the upswing, reversing some of the losses seen at the end of last month.

“This resurgence is fuelled by recent comments from US president-elect Donald Trump, who, over the weekend, issued a stark warning: he threatened to slap a massive 100% tariff on BRICS nations if they move away from the US dollar.

“This assertive stance extends, by implication, to nations that engage heavily with China on the trade front and maintain trade surpluses with the US, contributing to a weaker performance by the ringgit throughout the day,” he told Bernama today.

Sharing the same view, Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that the ringgit was weaker today, possibly due to the hawkish comments from Trump on measures related to import tariffs.

“Such comments were directed towards BRICS members especially on the US dollar as any move to pivot such currency would be met with heavy tariffs by the US.”

In fact, Afzanizam stated that Trump has yet to be inaugurated and therefore, it is merely his take on the evolving economic condition.

“While he is definitely going to be restrictive when it comes to China and the related parties, he also needs to be mindful of the consequences to the domestic economy especially when higher tariffs might lead to higher inflation and rising cost of living,” he said.

At 6pm, the local currency edged down to 4.4570/4.4625 against the US dollar, compared to Friday’s close of 4.4425/4.4495.

The ringgit traded mostly lower against a basket of major currencies.

It weakened versus the British pound to 5.6613/5.6683 from 5.6384/5.6473, strengthened against the euro to 4.6856/4.6914 from 4.6899/4.6973 and eased against the Japanese yen to 2.9648/2.9687 from 2.9589/2.9638 at Friday’s close.

The local unit, however, traded mostly higher against Asean currencies.

It rose against the Singapore dollar to 3.3113/3.3156 from 3.3146/3.3200, improved against the Indonesian rupiah to 280.1/280.6 from 280.2/280.8 and went up versus the Thai baht to 12.9196/12.9423 from 12.9459/12.9738.

It dipped against the Philippine peso to 7.59/7.61 from 7.58/7.59. - FMT