PETALING JAYA: The ringgit fell along with the rest of Asian currencies against the US dollar as US reciprocal tariffs continued to cast uncertainty on the global economy.
Apart from the US dollar, the ringgit also fell against Asean near peer currencies to end lower yesterday. They included the Thai baht, Singapore dollar and Philippine peso. It strengthened against the Indonesian rupiah.
Against key currencies, the ringgit ended 1.03% lower against the dollar at 4.4828, 1.09% weaker versus the Singapore dollar at 3.3291 and it was down by 1.13% against the euro at 4.9170.
The US dollar index or DXY, which measures the US dollar against a basket of major currencies such as the euro, Japanese yen and the British pound weakened slightly at press time by 0.159 to 102.86.
“Should there be any rate cuts by the US Federal Reserve, there are expectations that the dollar will then be weaker. I believe their priority would be to support growth,” said Socio-Economic Research Centre executive director Lee Heng Guie.
Lee said Asean currencies are also influenced by the movements in China’s yuan.
“There are many moving parts at the moment and forecasts including for the ringgit can be subject to change due to what is happening now,” he noted.
Maybank Research said while it is still unclear as to the outcome of the trade war, the impact is likely to weigh on growth and inflation across the world, including the United States.
“We shift our focus to the longer-term foreign exchange play. The greenback’s supreme status of exceptionalism seems to have significantly weakened.
“Trade blocs alienating the United States may weaken the US reserve status and its dominance in payments,” the research house added.
