The dollar’s rally began with moves in Japan and France before broadening into a wider rethink of short positions, says analyst.
IPPFA Sdn Bhd director of investment strategy and country economist Sedek Jantan said the US dollar’s rally was initially triggered by developments in Japan and France and has since evolved into a broader reassessment of short-dollar positions.
“The US dollar’s rebound this week reflects not only safe-haven demand but also a recalibration of global foreign exchange sentiment amid heightened policy and political uncertainty,” he told Bernama.
Sedek added that the ringgit’s movement should be seen primarily as an external effect of dollar dynamics rather than a reflection of domestic fundamentals.
“The sustained fiscal consolidation path and improved investor sentiment post-Budget 2026 remain supportive of medium-term ringgit stability,” he said.
In the near-term, however, the global rotation back into the US dollar as a safe-haven asset, amplified by temporary distortions from the US government shutdown, has reinforced downward pressure on emerging-market currencies, including the ringgit, he added.
At 6pm, the local currency stood at 4.2200/4.2260 against the US dollar, down from Thursday’s close of 4.2140/4.2195.
Meanwhile, the ringgit gained against a basket of major currencies. It rose versus the euro to 4.8838/4.8907 from 4.8988/4.9044 at Thursday’s close, strengthened against the Japanese yen to 2.7618/2.7659 from 2.7625/2.7653, and increased versus the British pound to 5.6084/5.6164 from 5.6420/5.6473.
Against Asean currencies, the ringgit closed mixed. It advanced versus the Thai baht to 12.8942/12.9184 from 12.9323/12.9505 and improved against the Singapore dollar to 3.2494/3.2543 from 3.2534/3.2568. However, it fell against the Philippine peso to 7.24/7.26 from 7.23/7.24 and was little changed against the Indonesian rupiah at 254.6/255.1 from 254.3/254.7. - FMT
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