The ringgit made slight gains against the US dollar in early Thursday trading, supported by weaker-than-expected US economic data, though it posted mixed results against other major and regional currencies.
According to Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid, the US Dollar Index (DXY) fell by 0.44% to 98.787 points after recent US economic indicators underwhelmed market expectations.
He pointed to the US Institute for Supply Management (ISM) services index, which dropped below the key 50-point threshold to 49.9 in May—well below the forecasted 52.0—signaling a contraction in the services sector.
“Based on the ISM survey, import tariffs were cited as a key source of uncertainty, pushing up raw material costs. Some suppliers are also holding back on inventory due to the unpredictable tariff environment,” Dr. Afzanizam noted.
He added that this uncertainty may prompt investors and traders to reassess the strength of the US economy, potentially benefiting emerging market currencies like the ringgit. “Friday’s Nonfarm Payroll report will be another crucial indicator to watch,” he said.
Looking ahead, he highlighted the upcoming US Federal Open Market Committee (FOMC) meeting on June 16–17 as a significant event, where the Federal Reserve is expected to unveil its macroeconomic forecast for the next three years.
At 8am on Thursday, the ringgit inched up to 4.2410/2495 against the US dollar from Wednesday’s closing of 4.2435/2490.
However, the local currency struggled against several other major currencies. It slipped against:
- The Japanese yen to 2.9705/9767 (from 2.9444/9486)
- The euro to 4.8428/8525 (from 4.8300/8362)
- The British pound to 5.7466/7581 (from 5.7427/7502)
In regional trading, the ringgit remained flat against the Philippine peso at 7.60/7.62 but weakened against:
- The Singapore dollar to 3.2973/3040 (from 3.2906/2951)
- The Thai baht to 13.0132/0493 (from 12.9679/9911)
- The Indonesian rupiah to 260.2/260.8 (from 260.4/260.8)
Despite Thursday’s modest improvement versus the greenback, market watchers will be closely monitoring upcoming US data and Fed policy moves for further direction on currency trends.
-Business Today
