Ringgit closes lower despite weaker US Dollar Index

 The local economy is expected to grow more than 4% in the second quarter, says analyst.

KUALA LUMPUR: The ringgit retreated against the greenback today despite the weaker US Dollar Index (DXY) and lower US Treasury yields after the recent downgrade of the US’s credit rating by Moody’s Ratings.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that the ringgit had climbed to RM4.2873 in the afternoon session from the previous day’s close of RM4.2908 before ending lower.

“The gains were likely capped as some traders took profit,” he told Bernama.

He noted that the Reserve Bank of Australia (RBA) decided to cut the cash rate by 25 basis points to 3.85% today after it was last reduced in February due to greater uncertainties in the global economic outlook following the tariff shocks of the US.

“Consequently, the Aussie dollar was weaker against the US dollar by 0.51% to US$0.6424 per Australian dollar.

“The RBA decision reflects uncertainties surrounding the tariff shocks, which will continue to affect monetary policy decisions across the globe,” he said.

Afzanizam said today’s data on Malaysia’s exports surprised on the upside when it grew by 16.4%, surpassing the consensus estimates of 7.5%.

“While it remains to be seen whether such a trajectory can be maintained in the months to come, the Malaysian economy in the second quarter should be able to grow more than 4%,” he said.

At 6pm, the local note eased to 4.2950/4.3010 versus the greenback from yesterday’s close of 4.2870/4.2945.

At the close, the ringgit traded mostly lower against a basket of major currencies.

It was slightly higher vis-à-vis the euro to 4.8340/4.8408 from yesterday’s 4.8344/4.8429, but depreciated versus the Japanese yen to 2.9727/2.9773 from 2.9596/2.9650, and dipped against the British pound to 5.7428/5.7509 from 5.7420/5.7521 previously.

The local note traded lower against its Asean peers.

It went down vis-à-vis the Philippine peso to 7.72/7.73 from 7.69/7.71 yesterday, decreased against the Singapore dollar to 3.3153/3.3202 from 3.3135/3.3195, and declined against the Thai baht to 12.9856/13.0116 from 12.9630/12.9924.

It slid against the Indonesian rupiah to 261.6/262.1 from 260.8/261.4. - FMT