Ringgit extends gains on tariff uncertainty
KUALA LUMPUR : The ringgit continued to strengthen against the US dollar today, buoyed by a softer US Dollar Index (DXY), which declined by 0.25% to 98.386 points.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the drop followed news that US president Donald Trump's administration plans to issue letters regarding its tariff decisions within the next two weeks.
He said the announcement has fuelled further uncertainty over the outcome of the ongoing trade negotiations.
'Whatever the case may be, the 10% universal tariff is likely to exert pressure on the US economy and risks of retaliation from other nations across the globe would accentuate the downside risks to global growth,' he told Bernama.
'Emerging market currencies, including the ringgit, are benefitting from the current trend.
'Next week's Federal Open Market Committee (FOMC) meeting on June 17-18 will be closely monitored by the market participants,' he said.
At 6pm, the local unit advanced to 4.2155/4.2245 against the greenback, from yesterday's close of 4.2345/4.2370.
At the close, the ringgit traded lower against a basket of major currencies.
It fell against the Japanese yen to 2.9329/2.9394 from 2.9187/2.9207, weakened versus the British pound to 5.7213/5.7335 from 5.7166/5.7200 and fell vis-à-vis the euro to 4.8765/4.8869 from 4.8426/4.8454 previously.
At the same time, the local currency traded mixed against its Asean peers, rising vis-à-vis the Philippine peso to 7.55/7.57 from 7.57/7.59 and rising against the Indonesian rupiah to 259.5/260.2 from 260.4/260.6.
However, the ringgit fell versus the Singapore dollar to 3.2934/3.3006 from 3.2925/3.2947 at yesterday's close and declined against the Thai baht to 12.9828/13.0173 from 12.9729/12.9870 yesterday.
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