Ringgit Ends Firmer As Concerns Over Fed Independence Weigh On US Dollar

By Danni Haizal Danial Donald

KUALA LUMPUR, Jan 12 (Bernama) -- The ringgit closed firmer against the greenback on Monday as concerns over the US Federal Reserve’s (Fed) independence weighed on the American dollar.

At 6 pm, the local currency advanced to 4.0605/0660 versus the US dollar from Friday’s close of 4.0700/0765.

IPPFA Sdn Bhd director of investment strategy and country economist, Mohd Sedek Jantan, said the concerns over Fed independence have triggered a broad pullback from US assets, pushing the US dollar index (DXY) lower and lifting emerging-market currencies, including the ringgit.

“For Malaysia, the key anchor remains the US bond market. Treasury yields have stabilised, signalling that this is still being treated as a political shock rather than a break in the monetary regime. As long as the yields remain contained, Asia's foreign exchange markets can hold their ground,” he told Bernama.

Mohd Sedek also noted that oil prices rose on escalating unrest in Iran, supporting Malaysia’s trade position, but pointed out that higher energy prices also raise global inflation risks that could eventually favour the US dollar. “For now, Fed-related uncertainty is the dominant driver keeping the ringgit supported,” he said.

At the close, the ringgit traded mixed against a basket of major currencies but higher versus ASEAN peers.

It appreciated versus the Japanese yen to 2.5717/5754 from 2.5888/5935 at Friday’s close, dipped against the British pound to 5.4630/4704 from 5.4579/4666, and eased vis-à-vis the euro to 4.7435/7499 from 4.7383/7459.

The ringgit was higher against the Singapore dollar at 3.1567/1613 from 3.1629/1682 at Friday’s close, gained vis-à-vis the Indonesian rupiah to 240.9/241.3 from 241.9/242.4, and advanced versus the Philippine peso to 6.85/6.86 from 6.87/6.88.

However, it slipped versus the Thai baht to 12.9961/13.0195 from 12.9474/9738 previously.

-- BERNAMA