Ringgit ends lower as global uncertainty drives demand for safe-haven currencies

 

KUALA LUMPUR: 

The ringgit extended yesterday’s losses to close lower against the greenback today, as the global economic outlook prompted investors to shift interest towards safe-haven currencies, an analyst said.

SPI Asset Management managing director Stephen Innes said the BRICS tariff threat still casts a shadow over regional markets, particularly as the Chinese yuan exerts downward pressure across regional currencies.

“With Chinese bond yields dropping ominously, there is a clear market anticipation of deeper rate cuts by China to bolster its weakening economy.

“This has resulted in a widening interest rate differential between the US and China: not only is the yuan falling, but it is dragging the Asean currency basket along with it,” he told Bernama today.

Amid this financial turbulence, Innes said Donald Trump’s unpredictable social media posts continue to inject a sense of tension and caution among traders, especially in Malaysia, leaving those betting against the US dollar in a particularly precarious position.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said market sentiments remain uneasy about the recent remarks by Trump on tariffs amid his approaching inauguration on Jan 20, 2025.

“Perhaps, the Federal Open Market Committee (FOMC) meeting on Dec 17 and 18 would shed more light on how the US Federal Reserve sees the economy as it will share its latest macroeconomic forecast, especially prospects for the Fed Fund Rate in 2025,” he said.

At 6pm, the local currency edged down to 4.4675/4.4720 against the US dollar, compared to yesterday’s close of 4.4570/4.4625.

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

It weakened versus the British pound to 5.6643/5.6700 from 5.6613/5.6683, depreciated against the euro to 4.7003/4.7050 from 4.6856/4.6914 and eased against the Japanese yen to 2.9825/2.9859 from 2.9648/2.9687 at yesterday’s close.

The local unit traded mostly lower against Asean currencies.

It fell against the Singapore dollar to 3.3223/3.3261 from 3.3113/3.3156, was almost flat against the Indonesian rupiah at 280.1/280.5 from 280.1/280.6 and went down versus the Thai baht to 12.9854/13.0042 from 12.9196/12.9423.

The ringgit dipped against the Philippine peso to 7.62/7.63 from 7.59/7.61. - FMT