Ringgit Strengthens Against Us Dollar Amid Tariff Shock Effects
By Engku Shariful Azni Engku Ab Latif
KUALA LUMPUR, May 26 (Bernama) -- The ringgit continued to strengthen against the US dollar at opening today, driven by tariff shocks that are expected to negatively impact the US economy, said an analyst.
At 8.04 am, the local note rose to 4.2100/2410 versus the greenback from Friday's close of 4.2285/2345.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the recent tax cut legislation passed by the US House of Representatives is expected to widen the fiscal deficit and increase government debt levels.
'The sovereign rating downgrade by Moody's Ratings, which occurred prior to the legislation's approval, has pushed US Treasury yields higher, with 30-year bonds exceeding the 5.0 per cent mark, making borrowing more expensive.
'As a result, markets are now at a critical crossroads, as the US dollar, traditionally seen as a safe-haven currency, is having that status revisited,' he told Bernama.
As such, the ringgit is expected to remain positive in light of the weak US dollar, he added.
Mohd Afzanizam said the current US$/RM support and resistance levels are at 4.0942 and 4.2624, respectively.
"Assuming the ringgit strengthens by a further 0.5 per cent this week, the US$/RM pair could settle around 4.2103, within a range of 4.22 to 4.23," he said.
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