Ringgit Strengthens Gains Appeal In Emerging Markets

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At 8am, the ringgit stood at 4.4340/4.4410 against the greenback, up from yesterday’s close of 4.4355/4.4390.KUALA LUMPUR: The ringgit opened slightly higher against the US dollar this morning as investors viewed Malaysia’s political and policy stability favourably among emerging markets, boosting the currency’s appeal amid mixed global sentiment.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said that despite global challenges, the ringgit had remained resilient, gaining 0.85% year to date and ranking as the fourth-best performing currency in Asia.
According to Bloomberg data, Malaysia was the fourth-best performer among emerging currencies, behind the Japanese yen, Singapore dollar and offshore Chinese renminbi.
In contrast, major emerging-market peers Indonesia and Turkey faced sharp sell-offs last week, weighing on sentiment across the asset class. The Indonesian rupiah has been under pressure, tumbling 2.97% year to date, prompting Bank Indonesia to intervene in currency markets to stem the slide.
“The rupiah has fallen to its lowest level since the 1997-98 Asian Financial Crisis, making it the region’s worst-performing currency and raising market concerns. While investors remain cautious, the situation has unexpectedly spurred interest in ringgit-denominated assets,” he noted.
Afzanizam added that the US dollar-ringgit pair was hovering around its immediate resistance level of RM4.4463, while technical indicators suggested the ringgit remained in a neutral zone, indicating limited movement in the near term.
Meanwhile, the US Dollar Index (DXY) has been fluctuating around 104 points, as recent economic data suggests consumers are becoming more cautious about the US economic outlook.
“The Conference Board Consumer Confidence Index fell to 92.9 points in March, its fourth consecutive monthly decline.
“More significantly, the Expectations Index dropped to 65.2 points, remaining below the 80-point threshold for two straight months. An index below 80 is often seen as a signal of a higher probability of a US recession,” Afzanizam said.
The ringgit traded higher against a basket of major currencies.
It rose against the euro to 4.7838/4.7914 from 4.7908/4.7946 at yesterday’s close but weakened against the British pound to 5.7394/5.7484 from 5.7351/5.7396 and fell against the Japanese yen to 2.9572/2.9620 from 2.9480/2.9503.
The local note was mostly higher against Asean currencies.
It edged down against the Singapore dollar to 3.3184/3.3241 from 3.3158/3.3186 at the previous close and weakened against the Thai baht to 13.1071/13.1418 from 13.0633/13.0813.
It was flat against the Philippine peso at 7.70/7.71 from 7.73/7.74 and unchanged against the Indonesian rupiah at 266.9/267.4 from 266.9/267.3 yesterday. - FMT

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