At 9 am (0100 gmt), the ringgit stood at 4.0780/0820 against the greenback from 4.0870/0920 on Monday.
TOKYO: Fears of a further escalation in the China-US trade dispute kept the dollar steady on Wednesday, holding gains made overnight after investors scooped up safe-haven assets, including U.S. Treasuries.
The People's Daily newspaper, owned by China's ruling Communist Party, warned that Beijing was ready to use rare earths for leverage in its trade war with the United States, saying in an extremely strongly worded commentary "don't say we didn't warn you".
Losses in the euro in the previous session also helped support the dollar, as analysts warned of more risks for the single currency on uncertainty surrounding the euro zone economy and the bloc's political future.
News late on Tuesday that no major U.S. trading partner met the Trump administration's currency manipulation criteria had a muted impact on the foreign exchange market.
"It looks like there has been a real surge in U.S. Treasuries," said Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.
"We're probably going to see some catch-up in the foreign exchange market over the next few sessions," Twidale said, adding that he expected safe-haven currencies such as the Japanese yen and the Swiss franc to be in demand.
Against a basket of six peers, the dollar was steady at 97.929, having ended up 0.3% overnight. The index was trading 0.45% off a two-year high of 98.371 hit on Thursday and was still up 1.8% for the year.
The dollar held up even after benchmark 10-year U.S. Treasury yields hit as low as 2.240%, their lowest since September 2017. The greenback's own status as a safe-haven helped amid worries about the trade tensions and Italy's budget policy. The U.S. 10-year yields were last at 2.245%.
The U.S. Treasury Department said in a report on Tuesday it reviewed the policies of an expanded set of 21 major U.S. trading partners and found that nine required close attention due to currency practices: China, Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, and Vietnam.
Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch, said the report had a muted impact on risk sentiment, adding that investors are watching how the United States and China will deal with their trade dispute going into the G20 meeting in Japan next month.
The euro edged up 0.04% to $1.1165, having shed nearly 0.3% during the previous session. The common currency remained not far off a near two-year low of $1.11055 brushed on Thursday.
European Union leaders are set to begin the process of filling a number of top EU posts, from the head of the European Commission to the European Central Bank.
"The reason we've seen the euro drop off is because the European zone in particular has been threatened by and troubled by the trade concerns," said Rakuten's Twidale.
"On the back of that, we also had those European elections so there's a lot of political instability in Europe," he added. "That's putting pressure on the currency."
Italian Deputy Prime Minister Matteo Salvini, whose far-right League triumphed in European elections on Sunday, said the European Commission could fine Italy 3 billion euros for breaking EU debt and deficit rules, a comment that weighed on the single currency.
The yen was unchanged at 109.38 per dollar after falling overnight on the lower U.S. yields and after U.S. President Donald Trump said on Monday he expected Japan and the United States to announce a trade agreement "probably in August."
The yen, which tends to draw steady support from a flight-to-safety bid during geopolitical or financial stress as Japan is the world's biggest creditor nation, remained just 0.2% above a three-month high of 109.02 yen touched on May 13.
"We think the yen will appreciate but given the carry that dollar/yen provides...a pickup in volatility would be needed for a larger move lower in dollar/yen," said Bank of America's Yamada.
The Australian dollar inched up 0.1% to $0.6930, about 0.9% off a recent trough of $0.6865. - Reuters
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