KUALA LUMPUR: The ringgit ended higher against the US dollar today, primarily driven by the United States (US) President Donald Trump’s inauguration speech, said an economist.
At 6 pm, the ringgit appreciated to 4.4730/4780 versus the greenback from Monday’s closing of 4.4910/4960.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that Trump’s administration appears to be hawkish in its approach to international trade.
“However, it will be guarded as they will re-assess the present state such as China’s adherence to the Phase One trade deal which was signed in January 2020 where China was supposed to import US$200 billion worth of goods and services from the US.
“Clearly, this yardstick has not been met and it provides grounds for the imposition of tariff,” he told Bernama.
Meanwhile, he sees Trump’s proposed tariff on China as a tactic to bring China to the negotiating table for better trade deals.
“We think the current administration would not want to sabotage its own economy at a time when the unemployment and inflation rate are low.
“On that note, the ringgit could stage a further rebound in the near term, but cautious sentiment will continue to prevail as we would see more announcements coming from the US President,” he added.
However, Mohd Afzanizam opined that Trump’s habit of using social media as a means to communicate policy measures could result in volatility in the financial markets.
At the close, the ringgit traded mostly higher against other major currencies.
It gained vis-a-vis the euro to 4.6291/6343 from Monday’s close of 4.6307/6358 and went up marginally versus the Japanese yen to 2.8691/8725 from 2.8741/8774 yesterday, but it inched down against the British pound to 5.4781/4842 from 5.4723/4784 previously.
Meanwhile, the local note traded mixed against ASEAN currencies.
It advanced against the Indonesian rupiah at 273.6/274.1 from 274.3/274.8 yesterday and improved against the Philippines’ peso to 7.65/7.66 from 7.67/7.68.
However, the ringgit slid against the Thai baht to 13.1123/1347 from Monday’s 13.0948/1155 and was almost flat against the Singapore dollar to 3.2899/2941 from 3.2899/2938 previously. – Bernama
