Ringgit Depreciates Amid Strong US Labor Data and Uncertainty Over Trump’s Trade Policies
KUALA LUMPUR – The Malaysian ringgit weakened against the US dollar on Friday, concluding the week on a lower note as robust US labor market data bolstered the greenback’s appeal and President Donald Trump’s trade stance introduced fresh uncertainties into the market.
At 6 pm local time, the ringgit slipped to 4.2475/2525 against the US dollar, down from the previous session’s close of 4.2410/2505, reflecting increased demand for the dollar fueled by positive US economic signals.
US Labor Market Strength Drives Dollar Gains
According to Stephen Innes, managing partner at SPI Asset Management, the recent release of lower-than-expected US initial jobless claims reinforced perceptions of a resilient American labor market. This optimism boosted US Treasury yields, which in turn supported the dollar against major currencies, including the ringgit.
“In the current environment, the ringgit’s decline is being driven predominantly by global macroeconomic dynamics rather than Malaysia’s own economic fundamentals,” Innes explained. “The currency is caught up in the broader momentum generated by strong US economic indicators, the escalating strength of the dollar, and heightened geopolitical tensions.”
Impact of US Trade Rhetoric
Innes added that political risks, especially those linked to US trade policy rhetoric from President Trump, contribute to market unease. Whether such trade remarks reflect a broader strategic shift or are part of pre-election posturing, markets are paying close attention.
“The intensifying trade tensions introduce an added layer of complexity to the ringgit’s outlook. Malaysia’s close economic relationships with China and BRICS countries face headwinds given Washington’s tough geopolitical stance,” he noted.
Supporting this view, Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, highlighted that the ringgit’s decline is further influenced by investor caution amid Trump’s hawkish trade rhetoric. “Renewed concerns about future US tariffs have dampened market sentiment and exerted downward pressure on regional currencies, including the ringgit,” he said.
Performance Against Other Currencies
While the ringgit weakened against the US dollar, it gained ground against several other major currencies by the market close:
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The ringgit strengthened against the British pound to 5.7524/7592 from 5.7716/7845.
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It appreciated against the euro to 4.9679/9737 from 4.9751/9863.
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It also rose relative to the Japanese yen, trading at 2.8893/8929 from 2.9014/9081. Conversely, the ringgit eased against key ASEAN currencies:
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The currency dipped versus the Thai baht to 13.0668/0886 from 13.0196/0548.
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It declined against the Philippine peso to 7.52/7.53 from 7.51/7.53.
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The ringgit traded lower against the Singapore dollar at 3.3186/3228 from 3.3159/3236.
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It also slipped against the Indonesian rupiah to 261.8/262.3 from 261.3/262.1. As the ringgit navigates these external pressures, market watchers remain cautious about the currency’s direction in light of ongoing global economic developments and geopolitical risks.
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