Ringgit closes lower on continuous demand for greenback

KUALA LUMPUR: The ringgit ended lower against the US dollar on the first trading day of the year, driven by continuous demand for the greenback due to concerns over the US Federal Reserve’s (Fed) potential decision to cut interest rates in 2025.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid told Bernama that in addition to the anticipation of smaller rate cuts by the Fed, market sentiment will continue to be influenced by concerns over the potential economic policies of the second Donald Trump administration.

Besides, he said, the US Dollar Index (DXY) also rose 0.33% to 108.487 points as demand for the US dollar continued to remain elevated.

At 6pm, the ringgit slid to 4.4760/4.4810 against the US dollar from Tuesday’s close of 4.4690/4.4745.

Markets were closed yesterday for New Year’s Day.

The ringgit closed mostly higher against other major currencies.

It slipped versus the Japanese yen to 2.8546/2.8580 from Tuesday’s close of 2.8529/2.8566 but appreciated against the British pound to 5.5869/5.5932 from 5.6095/5.6164 previously and strengthened vis-a-vis the euro to 4.6336/4.6387 from 4.6549/4.6606.

Meanwhile, the local note traded mixed against Asean currencies.

It weakened versus the Singapore dollar to 3.2859/3.2898 from 3.2824/3.2867 at the previous close and slid versus the Philippine peso to 7.73/7.75 from 7.70/7.72.

However, the ringgit firmed against the Thai baht to 13.0530/13.0744 from 13.0566/13.0830 on Tuesday and was higher vis-a-vis the Indonesian rupiah at 276.2/276.7 compared with 276.9/277.5 previously.