US Economic Data, Trade Uncertainty Weigh On Ringgit At Close

By Rosemarie Khoo Mohd Sani

KUALA LUMPUR, July 11 (Bernama) -- The ringgit ended the week lower against the US dollar on Friday as stronger US economic data fuelled demand for the greenback.

This came as lower-than-expected US initial jobless claims released overnight reinforced the narrative of a resilient  American labour market and boosted US Treasury yields, said SPI Asset Management managing partner Stephen Innes.

At 6 pm, the local note retreated to 4.2475/2525 against the greenback from Thursday’s close of 4.2410/2505.

Innes said the ringgit’s recent depreciation was driven more by global macroeconomic forces, including robust US economic data and rising geopolitical uncertainties, rather than Malaysia’s economic fundamentals.

“At this stage, the ringgit is no longer trading on local fundamentals. It is being swept along by the strong momentum of US macroeconomic indicators, dollar strength, and intensifying trade tensions.

“This renewed strength in the greenback is putting downward pressure on high-beta emerging market currencies, particularly those with close trade ties and higher sensitivity to global interest rates, such as the ringgit,” he told Bernama.

Innes said the rising political risks are stemming from US trade rhetoric, particularly from US President Donald Trump.  “Whether this is part of a broader strategic shift or merely pre-election posturing, the markets are taking notice. Even if viewed as a bluff by some, there is growing unease beneath the surface, especially given Malaysia’s strong ties with China and BRICS nations - relationships that are increasingly at odds with Washington’s current geopolitical stance,” he added.

Innes reckons this layer of political uncertainty adds complexity to the ringgit’s outlook, making it difficult for markets to price in or hedge against.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit eased today on renewed concerns over US tariffs. “The market sentiment was dampened as Trump maintained a hawkish stance on trade, fuelling uncertainty over future tariff measures against several countries,” he added.

He noted that the continued rhetoric has heightened investor caution, particularly in emerging markets, putting additional pressure on regional currencies, including the ringgit.

At the close, the ringgit was traded higher against a basket of major currencies.

It strengthened against the British pound to 5.7524/7592 from 5.7716/7845, rose versus the euro to 4.9679/9737 from 4.9751/9863, and improved against the Japanese yen to 2.8893/8929 from 2.9014/9081.

The local note, however, trended lower against ASEAN currencies.

It dropped against the Thai baht to 13.0668/0886 from 13.0196/0548 at yesterday’s close, and was easier versus the Philippine peso at 7.52/7.53 from 7.51/7.53.

The ringgit traded lower vis-à-vis the Singapore dollar at 3.3186/3228 from 3.3159/3236, and slipped against the Indonesian rupiah to 261.8/262.3 from 261.3/262.1 previously.

-- BERNAMA