Ringgit Opens Slightly Lower As Risk Aversion Lifts US Dollar

By Zufazlin Baharuddin

KUALA LUMPUR, Jan 5 (Bernama) -- The ringgit opened slightly lower against the US dollar on Monday as global risk appetite turned more cautious, prompting investors to pare exposure to emerging-market assets.

At 8 am, the local currency eased to 4.0580/0680 versus the greenback, compared with last Friday’s close of 4.0515/0560.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said periods of de-risking typically see capital rotate into the US dollar as a liquid safe haven, leaving regional currencies, including the ringgit, under temporary pressure.

“The latest US military strike on Venezuela has added to this risk-off tone. While the event itself does not alter Malaysia’s economic fundamentals, it heightens geopolitical uncertainty, which tends to lift demand for US assets and reinforce near-term dollar strength,” he told Bernama.

At the same time, he said the US Federal Open Market Committee’s December minutes have underpinned the dollar.

“The minutes revealed a divided committee, with most participants signalling that further rate cuts should be paused unless inflation continues to ease, while some argued for keeping rates unchanged for a prolonged period after three cuts in 2025.

“This more cautious US Federal Reserve stance has lifted US yield expectations, widening rate differentials and adding further pressure on the ringgit,” he added.

At the open, the ringgit traded lower against a basket of major currencies.

It depreciated against the Japanese yen to 2.5845/5911 from 2.5817/5848 last Friday, edged slightly lower versus the British pound to 5.4527/4662 from 5.4509/4569, and eased vis-à-vis the euro to 4.7499/7616 from 4.7488/7540.

The local note was mixed against ASEAN peers.

It weakened against the Singapore dollar to 3.1506/1586 from 3.1502/1540 and was down versus the Philippine peso at 6.89/6.91 from 6.88/6.89 last Friday.

Meanwhile, the ringgit gained versus the Thai baht to 12.8662/9073 from 12.8996/9201, while it was flat vis-à-vis the Indonesian rupiah at 242.6/243.3 from 242.2/242.6 previously.

-- BERNAMA