US president Donald Trump warned defence firms could be barred from paying dividends and share buybacks, says analyst.
IPPFA Sdn Bhd director of investment strategy and country economist, Sedek Jantan, said the US Dollar Index (DXY) climbed to 98.82 as investors turned to safe-haven assets after Trump warned that defence companies could be barred from paying dividends and share buybacks.
He said the situation is triggering a sell-off in US defence stocks and lifting global equity risk premium.
“The dollar was further supported by US economic data that offered little basis for markets to price in another near-term US Federal Reserve rate cut,” he told Bernama.
Meanwhile, Sedek said stronger Brent crude oil prices provided an underlying terms-of-trade tailwind for Malaysia as a net energy exporter.
At the time of writing, Brent crude price rose 0.95% to US$60.53 (RM245.90) per barrel.
However, he said, it was insufficient to offset the dominance of global risk-off flows and US dollar liquidity demand into the close.
At 6pm, the local currency edged down to 4.0580/4.0650 versus the greenback from yesterday’s close of 4.0560/4.0610.
At the close, the ringgit traded higher against a basket of major currencies.
It appreciated versus the Japanese yen to 2.5888/2.5935 from 2.5920/2.5954 at yesterday’s close, strengthened vis-à-vis the euro to 4.7389/4.7471 from 4.7394/4.7453 yesterday, and rose against the British pound to 5.4535/5.4630 from 5.4732/5.4799 previously.
The local note performed mostly better against its Asean peers.
The ringgit inched up vis-à-vis the Indonesian rupiah to 241.5/242.1 from 241.7/242.1 at yesterday’s close, climbed against the Singapore dollar to 3.1602/3.1659 from 3.1641/3.1682 yesterday, and firmed versus the Thai baht to 12.8731/12.9007 from 12.9630/12.9852.
However, it fell against the Philippine peso to 6.85/6.87 from 6.83/6.84 previously.- FMT
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