Ringgit on firmer footing against US$ in early trade

The Star

3 days ago

KUALA LUMPUR: The ringgit opened on a slightly firmer footing against the US dollar this morning, shrugging off the broader G10 currencies' weakness as a confluence of domestic optimism and regional tailwinds lifted sentiment, said an analyst.
At 8.07 am, the local note rose to 4.2120/2225 against the greenback from Thursday's close of 4.2135/2210
SPI Asset Management managing partner Stephen Innes said while better-than-expected United States (US) data and rising Treasury yields have weighed on most major currencies, the ringgit is drawing strength from positive developments closer to home.
"There is growing confidence that Malaysia could soon secure a trade deal with the US, potentially modelled off the 15 per cent tariff truce the US struck with Japan.
"That alone has markets pricing in a more favourable export outlook, particularly for Malaysia's high-value sectors,' Innes told Bernama.
On Thursday, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz said Malaysia is still on track to secure a trade deal with the US by the Aug 1 deadline at the lowest possible tariff.
Innes said investor sentiment was also buoyed by anticipation surrounding next week's high-level talks in Stockholm, between the US Secretary of Treasury Scott Bessent and senior Chinese officials.
He noted that the markets see this as a potential catalyst for de-escalation in broader US-China tensions, which historically boosts risk appetite across Asia, including for the ringgit.
"The multiplier effect from Malaysia's recent fiscal stimulus, most notably the RM100 cash handout and fuel subsidy plan, is adding a layer of domestic support.
"These measures are expected to cycle quickly through the economy, bolstering consumption and investor confidence in the near term.
"Altogether, these factors are helping the ringgit defy the gravitational pull of a stronger US dollar and rally into the session with solid momentum,' said Innes.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects the ringgit to trade within the RM4.21-RM4.23 range against the US dollar today, as he anticipates profit-taking activities in light of strong gains this week.
At the opening, the ringgit was higher against a basket of major currencies.
It advanced against the Japanese yen to 2.8606/8680 from 2.8751/8804 at the close on Thursday, appreciated against the British pound at 5.6883/7025 from 5.7080/7182 yesterday and rose against the euro to 4.9491/9614 from 4.9517/9605 previously.
The local note was also mostly higher against regional peers.
It rose vis-à-vis the Singapore dollar to 3.2958/3045 from 3.2995/3057 on Thursday and inched up against the Indonesian rupiah to 258.4/259.2 from 258.5/259.1 yesterday.
The ringgit also strengthened against the Thai baht to 13.0459/0857 from 13.0570/0863 on Thursday and was flat against the Philippine peso, remaining at 7.43/7.45 since yesterday. - Bernama