Ringgit Closes Higher Amid US-EU Tariff Concerns, Easing Japanese Govt Bonds

By Danni Haizal Danial Donald

KUALA LUMPUR, Jan 21 (Bernama) -- The ringgit closed higher against the US dollar as market sentiment improved amid concerns over the United States’ tariffs against the European Union (EU) and geopolitical risks, while pressures in the Japanese Government Bond (JGB) market eased.

At 6 pm, the local currency rose to 4.0445/0495 against the greenback from 4.0530/0580 at Tuesday’s close.

Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, said the local note was well supported against the US dollar, appreciating by 0.14 per cent towards the end of the day.

“Risk-off sentiments are very much prevalent with the US Dollar Index (DXY) falling by 0.04 per cent to 98.59 points while spot gold prices rose 1.99 per cent to US$4,858.11 per ounce,” he told Bernama.

Mohd Afzanizam said thus far, the ringgit has been able to withstand the market volatility quite well as macroeconomic data continued to show resilience in the Malaysian economy.

“This has strengthened the case for a no-change in the overnight policy rate (OPR) tomorrow,” he said.

Meanwhile, SPI Asset Management managing partner Stephen Innes said the sell-off in the JGB market was extreme by any measure, and its shockwaves have been felt globally.

He noted that the rise in Japanese yields quickly spilt over into global markets, pushing bond yields higher elsewhere and quietly dampening demand for risk-sensitive assets.

“Regionally, the higher JGB yields matter. Currencies such as the ringgit are not weakening outright, but their upward momentum has stalled as global bond demand softens and investors grow more cautious,” he said.

Meanwhile, the local note ended firmer versus other major currencies.

It appreciated versus the Japanese yen to 2.5598/5631 from 2.5696/5729 on Tuesday, gained versus the British pound to 5.4237/4304 from 5.4618/4686 previously, and strengthened vis-a-vis the euro to 4.7337/7395 from 4.7530/7588 yesterday.

Similarly, the ringgit traded mostly higher against ASEAN currencies.

It rose against the Singapore dollar to 3.1502/1543 from 3.1602/1646 on Tuesday, rose versus the Thai baht to 13.0086/0301 from 13.0397/0629 and was firmer vis-à-vis the Indonesian rupiah at 238.7/239.3 from 239.0/239.4, previously,

However, it eased against the Philippines’ peso to 6.82/6.83 from 6.81/6.83 yesterday.

-- BERNAMA