The ringgit started trading on Wednesday with a stronger performance against the United States (US) dollar, supported by the dollar's weakness and hopes for the success of trade negotiations ahead of the implementation of new US tariffs on August 1.
At 9am, the ringgit rose to 4.220 against the US dollar from Tuesday's close.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid expects the ringgit to trade in the range of RM4.22 to RM4.24 today, as investor sentiment is still in a cautious mode with current developments.
Meanwhile, SPI Asset Management managing partner Stephen Innes described the strengthening of the ringgit as a natural reaction to the changing global macroeconomic narrative.
According to him, falling US bond yields, uncertainty over President Donald Trump's trade policy and hopes for tariff easing have given emerging market currencies, including the ringgit, an advantage.
He said Malaysia was currently negotiating a lower tariff rate of between 15 and 20% compared to the base tariff of 25%, in line with concessions given to Vietnam and Indonesia.
He explained that as long as the negotiations were ongoing, the market considered Malaysia to have the potential to avoid the worst impact of US trade policies.
However, the performance of the ringgit was mixed against other currencies.
The ringgit depreciated against the Japanese yen to 2.8767/2.8891 from 2.8690/2.8739 and also weakened against the euro at 4.9528/4.9740 from 4.9512/4.9594. However, the ringgit rose slightly against the British pound to 5.7052/5.7295 from 5.7088/5.7183.
The ringgit's performance was more encouraging at the regional level.
It strengthened against the Singapore dollar to 3.3001/3.3144 from 3.3011/3.3071 and also rose against the Indonesian rupiah and Philippine peso. The ringgit, however, depreciated slightly against the Thai baht to 13.1138/13.1767 from 13.0899/13.1172.
With the tariff deadline approaching, the focus remains on Malaysia's ability to conclude negotiations with Washington. If successful, it is expected to breathe new life into the ringgit and boost investor confidence in the near term.
