KUALA LUMPUR, May 5 — The ringgit edged up slightly against the US dollar today, as a weaker greenback, weighed down by dovish sentiment from the United States (US) Federal Reserve (Fed) on interest rates and new trade developments related to China, supported the local currency, said an analyst.
At 8 am, the local currency inched up to 4.2520/2615 versus the greenback from last Friday’s close of 4.2560/2600.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid opined that the ringgit could stay positive in the near future as the value of the US dollar is likely to stay weak, given the uncertainties over tariff policies and the impact it may have on the US economy.
“The local note has performed favourably against the greenback as it appreciated to 4.2568, gaining 1.39 per cent on Friday,” he told Bernama.
He said the special Parliament session today will also be the markets' main focus as they would want to see the plans to mitigate the impact of the tariff shocks initiated by the US President Donald Trump administration.
“Key areas would be the possible revision to the growth forecast and the short-term measure to be announced by the government,” he added.
Meanwhile, on the global front, the Trump administration has indicated its willingness to cut the tariff rate on China at some point in the future, following concerns about the decline in global trade.
He noted that the US labour market appears resilient amid the tariff shocks, leading to higher stock prices and bond yields last Friday.
“Even so, the US Dollar Index (DXY) was not impressed by such development as the index fell 0.05 per cent to 99.984 points.
“While the US nonfarm payrolls beat market estimates in April, the monthly average showed that the pace of job creation has scaled down to 133,000 in the first four months of 2025 versus 176,000 monthly average during the same period last year,” he added.
Hence, the Federal Open Market Committee meeting on May 6 and 7 will be closely monitored as traders and investors gauge the Fed’s next move on the benchmark interest rates, Mohd Afzanizam said.
It was reported that the Fed is still widely expected to cut rates in June, with traders pricing in over 100 basis points of easing by year-end.
Back home, the ringgit traded higher against a basket of major currencies and Asean peers.
It rose versus the Japanese yen to 2.9389/9459 from 2.9437/9467 at Friday’s close, strengthened vis-a-vis the euro to 4.8133/8240 from 4.8297/8342 previously, and improved against the British pound to 5.6424/6550 from 5.6639/6692.
Against its Asean currencies, the ringgit was higher versus the Singapore dollar at 3.2778/2857 compared to Friday's close of 3.2862/2898 and gained vis-a-vis the Thai baht to 12.8502/9011 from 12.8697/8903.
The local note also inched up against the Philippine peso to 7.64/7.67 from 7.65/7.67 on Friday and marginally higher versus the Indonesian rupiah to 258.6/259.3 from 258.8/259.3.
— Bernama
