RINGGIT FALLS AGAINST US DOLLAR AMID US TARIFF HIKES ON CANADA, MEXICO, AND CHINA

By Siti Radziah Hamzah

KUALA LUMPUR, Feb 3 (Bernama) -- The ringgit weakened against the US dollar on Monday, primarily due to the latest tariff imposition by the United States on Canada, Mexico, and China, according to analysts.

At 6 pm, the ringgit fell to 4.4710/4800 against the greenback from Friday’s close of 4.4550/4600. 

SPI Asset Management managing partner Stephen Innes said despite the tariff onslaught, there were signs of an olive branch from China, which appeared eager to open trade talks.

Most notable was Beijing’s plans to not devalue the yuan, a move that is meant as a peace offering to Washington given the longstanding US perception of China as a currency manipulator, he said.

“While the tariff hit was undeniably sharp, there is growing market sentiment that this round of trade tensions could be far shorter-lived than the last major trade war.

“The prospect of a quicker rollback of tariffs is offering some support, but volatility remains elevated,” Innes told Bernama.

He added that the real wildcard, of course, was Donald Trump himself as his unpredictability on trade policy means the next 24 to 48 hours could be pivotal in setting the ringgit’s trajectory.

“Markets will be watching for any further escalation, a potential diplomatic breakthrough, or even an unexpected shift in tone from Washington,” Innes said.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the next thing to watch is how the US Federal Reserve (Fed) officials would react to the current development as a series of Fed officials will have their public engagement this week.

“A hawkish statement would mean the outlook for the US dollar remains favourable, cementing the views that the Fed is not in a hurry to cut rates in the near term,” he said.

Meanwhile, the ringgit was traded mostly higher against other major currencies.  

It fell against the Japanese yen to 2.8838/8898 from 2.8798/8832, higher against the euro to 4.5747/5839 from 4.6247/6299, and advanced against the British pound to 5.4966/5077 from 5.5336/5398. 

The local note was mostly traded higher against ASEAN currencies.  

It strengthened against the Singapore dollar to 3.2709/2777 from 3.2854/2896 and went up against the Thai baht to 13.1345/1687 from 13.2274/2498.   

It was higher against the Indonesian rupiah to 271.7/272.5 from 273.2/273.6 and also against the Philippine peso to 7.62/7.64 from 7.63/7.64. 

 -- BERNAMA