KUALA LUMPUR – The ringgit opened slightly lower against the US dollar due to the rise in the US Dollar Index (DXY) after President Donald Trump issued an executive order to raise import tariffs, said an analyst.
At 8am today, the ringgit weakened to 4.4785/4970 against the greenback, compared to Friday’s close of 4.4550/4600.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the DXY has gained momentum to 109.258 points after Trump issued an executive order to raise import tariffs to 25% for imports coming from Canada and Mexico and 10% for imports from China.
“The measures will take effect on Tuesday. This marks the beginning of a trade war as the affected countries have started their retaliatory measures,” he told Bernama today.
Afzanizam said this is going to be a risk-off mode now as it introduces greater uncertainty regarding its impact on US inflation and the US Federal Reserve’s (Fed) response
He noted that the Fed would likely be cautious as the inflation trajectory is expected to be elevated, therefore the ringgit could stabilise around the current level but downside risks remain fairly visible in light of the ongoing trade war.
Meanwhile, the ringgit traded mixed against major currencies and Asean currencies .
It advanced against the euro to 4.5878/6067 from Friday’s 4.6247/6299 and appreciated against the British pound to 5.5041/5268 from 5.5336/5398. However, the local note edged lower against the Japanese yen to 2.8819/8942 from 2.8798/8832
The local note inched higher against the Singapore dollar to 3.2726/2868 from Friday’s 3.2854/2896 and strengthen against the Thai baht to 13.1535/2187 from Friday’s 13.2274/2498.
However, the local note inched lower against the Indonesian rupiah at 274.6/275.9 compared to Friday’s 273.2/273.6 and depreciated against the Philippine peso to 7.67/7.71 from 7.63/7.64. – February 3, 2025