Ringgit Opens Higher Against US Dollar Amid Easing US-China Trade Tensions

Strategic Insights -

The ringgit opened stronger against the US dollar on [current date] as easing US-China trade tensions brought relief to the financial markets, reducing recession fears and boosting risk-on sentiment among traders and investors. According to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid, the moderation in US consumer price index (CPI) suggests that concerns over US tariff-induced inflation may take a backseat for now. The economist attributed the appreciation of the ringgit to the improved economic data, which indicates that the US Federal Reserve (Fed) has the policy space to reduce the Fed Fund Rate going forward.

Key Takeaways:

  • The ringgit opened higher against the US dollar due to easing US-China trade tensions, reducing recession fears and boosting risk-on sentiment among traders and investors.
  • The US consumer price index (CPI) grew 2.3 per cent year-on-year in April, slightly below market expectations of 2.4 per cent.
  • The core CPI sustained at 2.8 per cent, indicating moderation in inflation.
  • The economic data indicates that the US Federal Reserve (Fed) has the policy space to reduce the Fed Fund Rate going forward.
  • The Federal Open Market Committee meeting on June 17 and 18 will be crucial in determining the Fed's next move.
  • The latest National Federation of Independent Business Optimism Index declined 95.8 points in April, indicating weak business sentiment.
  • The ringgit has depreciated by 2.8 per cent against the US dollar since May 5, but is expected to oscillate around RM4.32 to RM4.33 today.
  • The ringgit traded mostly lower against a basket of major currencies, except against its ASEAN peers.

Statistics:

  • 2.3 per cent: Year-on-year growth of US Consumer Price Index (CPI) in April.
  • 2.8 per cent: Core CPI growth rate in April.
  • 95.8 points: Decline in the National Federation of Independent Business Optimism Index in April.
  • 2.8 per cent: Depreciation of the ringgit against the US dollar since May 5.
  • 4.3045/3245: Opening price of the ringgit against the US dollar on [current date].
  • 4.3185/3250: Closing price of the ringgit against the US dollar on Tuesday.
  • RM4.34: Lowest price of the ringgit against the US dollar yesterday.
  • RM4.3218: Highest price of the ringgit against the US dollar yesterday.

Sources:

  • BERNAMA News Agency (14 May 2025)
  • Bank Muamalat Malaysia Bhd
  • US Federal Reserve (Fed)
  • National Federation of Independent Business
  • US Department of Labor