Ringgit rises slightly as US economic data weakens

[MALAYSIA] The ringgit opened marginally stronger against the US dollar on Friday, trading within a broader range as markets grapple with ongoing global tariff tensions and subdued US economic data, according to an economist.

As of 8 am, the local currency edged up to 4.3115/3310 against the greenback compared to Wednesday’s close of 4.3130/3185. Markets were closed on Thursday in observance of the Labour Day holiday.

The modest appreciation comes as investors weigh mixed global cues. While the US Federal Reserve has held a cautious tone on interest rate policy, softer-than-expected economic data has spurred speculation about a potential pause in monetary tightening. This shift has provided some breathing room for emerging market currencies, including the ringgit, which had previously come under pressure from a strengthening US dollar.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Institute for Supply Management’s (ISM) manufacturing index dipped to 48.7 points in April from 49.0 in March, reflecting broader concerns within the business community over tariff impacts.

“Survey responses indicate a high level of anxiety and uncertainty surrounding tariff regulations, which could have major implications for operating costs and supply chains,” he told Bernama.

Persistent US-China trade tensions, compounded by recent tariff hikes on key imports such as steel and electric vehicles, have added to investor caution. Malaysia, as an export-reliant economy, remains sensitive to global trade shifts. Nonetheless, steady prices for key commodities like palm oil and crude oil have helped cushion some of the external shocks.

Dr Mohd Afzanizam also pointed out that continuing claims for US jobless benefits climbed to 1.92 million for the week ending April 19, up from 1.83 million previously—the highest level since November 2011—signaling potential cracks in the labour market.

“This could have implications for emerging market currencies, especially with the US dollar index (DXY) showing signs of fatigue amidst the uncertainty,” he said. “Asian currencies have remained relatively firm despite tariff-related disruptions, and the ringgit may continue to hover in a narrow range of RM4.31 to RM4.32 as some investors look to lock in profits.”

Traders are also closely monitoring Malaysia’s upcoming economic releases, including trade and inflation data, for clearer direction. A strong performance could uplift sentiment, while weaker readings may weigh on the currency’s outlook.

Against a broader basket of major currencies, the ringgit was also trading higher. It advanced against the Japanese yen to 2.9663/9799 from 3.0142/0182 on Wednesday, gained on the euro at 4.8711/8932 from 4.9009/9071, and strengthened versus the British pound to 5.7296/7555 from 5.7626/7699.

Performance against ASEAN currencies was mixed. The ringgit appreciated against the Singapore dollar to 3.2892/3046 from 3.3027/3074 and rose against the Thai baht to 12.8529/9230 from 12.9066/9304.

This divergence reflects varying economic trajectories across the region. Singapore’s resilient financial sector has supported the Singapore dollar, while recent fiscal stimulus in Thailand has buoyed the baht. Conversely, Indonesia’s rupiah has come under pressure from ongoing capital outflows.

Meanwhile, the ringgit held steady against the Philippine peso at 7.72/7.76 from 7.72/7.73, but slipped slightly against the Indonesian rupiah to 260.0/261.3 from 257.9/258.4.