Ringgit catches cold as US turns up tariff heat
At 8 am, the local note depreciated to 4.2345/2430 versus the greenback from Monday's close of 4.2310/2400.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) rose by 0.31 per cent to 97.480 points following the US government's announcement that the pause period for the reciprocal tariff would expire soon.
The tariff rate for Malaysia has been revised up slightly to 25 per cent from 24 per cent prior to the pause.
Mohd Afzanizam noted that under the latest round of tariffs announced, some countries — such as Laos, Myanmar, Cambodia, Bangladesh and Bosnia — are seeing a reduction in tariff rates compared with the figures given in April, while others will have unchanged or slightly higher rates.
'As for Malaysia, the tariff rate has been revised upward to 25 per cent from 24 per cent previously. We believe this will influence market sentiment today, likely leading to a risk-off mode,' he told Bernama.
In this regard, Mohd Afzanizam said, the ringgit could trade on a cautious note, possibly around RM4.23 to RM4.25 today.
At market open, the ringgit traded mostly lower against a basket of major currencies.
The local currency appreciated versus the Japanese yen to 2.9029/9092 from 2.9091/9155 at Monday's close.
However, it eased against the British pound to 5.7691/7807 from 5.7563/7685 yesterday and declined vis-à-vis the euro to 4.9700/9800 from 4.9647/9752 previously.
Meanwhile, the ringgit traded lower against its Asean counterparts with the exception of the Thai baht.
It rose versus the Thai baht to 12.9745/13.0082 from 12.9837/13.0173 at yesterday's close.
However, the ringgit slipped vis-à-vis the Singapore dollar to 3.3110/3180 from 3.3096/3172 on Monday, weakened against the Indonesian rupiah to 260.7/261.3 from 260.5/261.2 previously, and edged down versus the Philippine peso to 7.47/7.49 from 7.46/7.48. — Bernama
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
37 minutes ago
- The Star
China must strike a delicate balance in its approach towards Thai-Cambodian conflict, say analysts
CHONGQING, (China): China faces a delicate balancing act as it decides what role it should play in the ongoing border hostilities between Thailand and Cambodia, two South-east Asian nations that are its close neighbours and which it wields strong influence over. Analysts told The Straits Times that while the clash, which began on Thursday (July 24) and has so far reportedly left at least 16 dead, could present an opportunity for China to showcase its leadership in the region, the world's second-largest economy is likely to keep to its traditional approach of having the two countries resolve the matter on their own. It is also likely to first look to Asean as it assesses how it can best help the process along. But that does not mean that China will not attempt to bring both countries to the negotiating table as the conflict is happening in its neighbourhood, said Professor Fan Lei, an expert on China-Asean relations at China's Charhar Institute, an international relations think-tank. Asean is China's largest trading partner, representing 16.6 per cent of the world's second-largest economy's overall foreign trade. Total trade between Asean and China reached 1.71 trillion yuan (S$305 billion) in 2024, up 7.1 per cent from 2023. Analysts pointed to how China can play a bigger role in the dispute between Thailand and Cambodia, given that China is both countries' top trading partner and thus wields strong economic influence over both states. Thailand relies on Chinese imports such as machinery, electronics and vehicles. China is also Thailand's top source of foreign tourists. Meanwhile, bilateral trade between Cambodia and China grew 26.9 per cent in the first six months of 2025, compared with the same period in 2024, official data from Cambodia showed. China is a major investor in both Thailand and Cambodia in sectors such as electric vehicles, infrastructure and real estate. It also conducts separate military exercises with Cambodia and Thailand. In April, Chinese-sponsored upgrades to Ream Naval Base in Cambodia raised concerns about China's growing footprint in South-east Asia. But China has to tread a delicate balance. On the one hand, 'China may feel that it should not just sit idly by and do nothing if such military conflict is in its neighbourhood', said Associate Professor Li Mingjiang, an expert on Chinese foreign policy and regional security at the S. Rajaratnam School of International Studies. On the other hand, it has to be mindful not to 'leave the impression it is disregarding Asean', said Professor Zhu Feng, dean at the School of International Studies at Nanjing University. Already, countries in South-east Asia are wary of China's expanding influence in the region – and its clashes with the Philippines over maritime territorial claims – as they navigate an increasingly complex geopolitical landscape amid intense US-China rivalry. That is why China is most likely to conduct 'quiet and informal mediation', Prof Li said, adding that he believes 'Chinese diplomats may already be involved in discussions with Cambodia and Thailand, urging them to de-escalate and engage in talks'. Professor Gu Jiayun, vice-dean at the School of Asian Studies at Beijing Foreign Studies University, said: 'It is in China's interest to keep the peace among its neighbours, given that conflict can hurt the region's as well as its own development prospects.' Prof Gu said that both Thailand and Cambodia have 'shown restraint in the clash so far, so they might be looking for an out to start negotiations'. Publicly, Thailand has rejected mediation efforts from third countries to end the ongoing conflict. However, it has signalled that the door will be kept open for Asean to facilitate a return to bilateral negotiations with Cambodia. Phnom Penh has written to the United Nations for help – the first time in more than a decade that an Asean member state has made such a request. The latest border dispute escalated sharply on July 24 after a Thai F-16 fighter jet bombed targets in Cambodia that day. Tensions between Thailand and Cambodia have been steaming since May, when a Cambodian soldier was killed during a brief exchange of gunfire near the border in north-eastern Thailand. Both countries – which share a long history of border disputes that date back to France's occupation of Cambodia until 1953 – have blamed each other for the latest escalation, and downgraded their diplomatic ties on July 23. During a meeting between Chinese Foreign Minister Wang Yi and Asean secretary-general Kao Kim Hourn in Beijing on July 25, Wang said that China 'stands ready to continue playing a constructive role in easing tensions (between Thailand and Cambodia) and de-escalating the situation in an impartial and fair manner'. Calling the latest deadly clash 'distressing and concerning', Wang added: 'China appreciates and supports the proactive mediation efforts of the Asean Chair and encourages the 'Asean Way' to promote dialogue and political resolution.' Asean's fundamental principles include mutual respect for the sovereignty of all nations, non-interference in the internal affairs of member states, peaceful settlement of disputes, and renunciation of the threat or use of force. On July 24, a Chinese Foreign Ministry spokesman told reporters at a regular briefing that 'China has and will continue to promote talks (between the two Asean states) for peace in its own way, and play a constructive role in promoting de-escalation'. Prof Fan said that China is likely to draw Cambodia and Thailand into negotiations with economic ways. This would be in line with the Chinese government's emphasis on cooperative win-win partnerships and non-interference principles regarding foreign diplomacy that are part of China's Three Global Initiatives, he added. 'It is also a possibility that China might encourage Thailand and Cambodia to resolve their dispute at Hong Kong's new international mediation body,' Prof Fan said. China signed on May 30 a convention to set up an international organisation for mediation in Hong Kong to resolve cross-border disputes among countries and international companies that Beijing hopes can match up to the UN's International Court of Justice. Analysts noted that China's actions will be a test of its diplomatic strength in the region. Prof Li said China has been signalling that 'it does want to gradually play a slightly larger role in the region' that goes beyond traditional security issues. Chinese President Xi Jinping's first overseas trip in 2025 amid growing trade tensions with the US was to South-east Asia, where he visited Malaysia, Cambodia and Vietnam for a week in April. Prof Li said: 'The conflict between Cambodia and Thailand could be an opportunity for China to try out its limited role so far in addressing the security issues in the Mekong region, cautiously, quietly and informally, of course.' - The Straits Times/ANN
Malay Mail
an hour ago
- Malay Mail
Bursa faces choppy week ahead as US tariff decision looms, says analyst
KUALA LUMPUR, July 26 — The risk of higher United States (US) tariffs on Malaysia as the Aug 1 deadline draws near is likely to weigh on Bursa Malaysia next week, although domestically-oriented counters are expected to remain relatively resilient, supported by firm internal demand and fiscal tailwinds. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said volatility is expected to intensify as markets approach a critical inflection point in global trade policy. 'Domestically-oriented counters on Bursa Malaysia are likely to remain relatively resilient. However, export-driven sectors may continue to face pressure in the absence of a favourable resolution to the tariff negotiations,' he told Bernama. He noted that no formal announcement has been made on the revised US tariff schedule for Malaysia. 'Should Malaysia succeed in securing a rate below the symbolic 20 per cent threshold, we anticipate renewed investor interest, particularly in the manufacturing and electrical and electronics sectors. Until then, most investors are expected to adopt a wait-and-see approach, prioritising capital preservation over risk-taking,' he said. Regionally, market focus is shifting towards renewed US–China trade diplomacy as Chinese Vice Premier He Lifeng is set to lead high-level negotiations in Sweden from July 27–30, ahead of the expiry of the 90-day tariff suspension on Aug 12. 'The outcome will be instrumental in shaping regional trade sentiment and broader market tone heading into August,' Mohd Sedek said. Globally, investor attention remains fixed on a packed US macroeconomic calendar, particularly with the upcoming the Federal Open Market Committee meeting on July 30, the June Personal Consumption Expenditure inflation print and July non-farm payrolls, which will provide important policy signals. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said market participants will turn their focus to China's July Purchasing Managers Index as well as Eurozone Consumer Price Index. For the week just ended, optimism spurred by Prime Minister Datuk Seri Anwar Ibrahim's 'appreciation package' and renewed confidence in domestic fiscal support lifted utilities and consumer counters, but the momentum proved short-lived as broad-based selling later overshadowed mid-week support from telco stocks. For the week under review, the benchmark index rose 7.90 points to 1,533.76 on Friday from 1,525.86 a week earlier. The FBM Emas Index increased 26.99 points to 11,506.82 and the FBMT 100 Index gained 28.03 points to 11,269.72, but the FBM Emas Shariah Index slid 8.89 points to 11,528.98, the FBM 70 Index dipped 90.15 points to 16,607.57 and the FBM ACE Index dropped 32.77 points to 4,639.02. By sector, the Financial Services Index jumped 99.4 points to 17,454.23, the Plantation Index reduced 7.10 points to 7,434.79 and the Energy Index went up 0.21 of a point to 739.85. Weekly turnover narrowed to 11.92 billion units worth RM11.43 billion from 15.53 billion units worth RM11.77 billion in the previous week. Main Market volume slid to 6.63 billion units valued at RM9.70 billion compared with 6.73 billion units valued at RM10.07 billion previously. Warrant turnover grew to 7.10 billion units worth RM1.15 billion from 6.83 billion units worth RM966.72 million in the preceding week. ACE Market volume shrank to 1.68 billion units valued at RM577.05 million versus 1.97 billion units valued at RM729.96 million previously. — Bernama
Malay Mail
an hour ago
- Malay Mail
Ringgit seen hovering around RM4.22–RM4.24 next week amid Fed policy hold
KUALA LUMPUR, July 26 — The ringgit is expected to hover between RM4.22 and RM4.24 next week as the US Federal Reserve (Fed) is anticipated to maintain its policy rate, said an analyst. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this outlook is tied to the upcoming Federal Open Market Committee (FOMC) meeting, scheduled for July 29–30, 2025. 'Based on the interest rate futures market, the Fed is likely to keep the Federal Funds Rate steady at 4.50 per cent. Technical indicators suggest that the US dollar-ringgit exchange rate is currently in a neutral zone,' he told Bernama. Meanwhile, SPI Asset Management managing partner Stephen Innes expects the ringgit to trade within a relatively narrow range of 4.2080–4.2280, with trade-related headlines and external sentiment continuing to drive short-term direction. On a Friday-to-Friday basis, the ringgit ended the week better against the greenback, closing at 4.2195/2245 versus 4.2410/2455 previously. However, the local note traded lower against a basket of major currencies. The ringgit depreciated vis-à-vis the Japanese yen to 2.8529/8565 from 2.8517/8549 and declined versus the euro to 4.9507/9566 from 4.9336/9388 at the end of last week. However, it gained against the British pound to 5.6786/6853 from 5.6999/7060 last Friday. Against Asean currencies, the ringgit trended higher. The local note firmed against the Singapore dollar to 3.2937/2978 from 3.3027/3065, strengthened versus the Thai baht to 13.0268/0478 from 13.3027/3065, rose versus the Indonesian rupiah to 258.5/258.9 from 260.2/260.6 previously, and improved against the Philippine peso to 7.38/7.40 from 7.41/7.43 last Friday. — Bernama
