The ringgit opened stronger against the US dollar today following news that the US has postponed its planned tariff hike on Canadian and Mexican goods.
This was coupled with softer US economic data and led to improved market sentiment.
At 9.55am, the ringgit was at 4.4520, up 0.40% against the US dollar from its closing price of 4.4710 at the end of Monday.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid explained that President Donald Trump had successfully negotiated a one-month delay in the 25% import tariff and brought leaders from Canada and Mexico to the negotiating table.
He added that Trump is using tariffs as a tool to get a better deal.
While this may cause market volatility, the US economy remains strong and it is unlikely that the president will want to reverse the positive trend.
The US Dollar Index (DXY) fell from a high of 109.878 to 108.404 following a temporary easing in trade war tensions.
However, he said the market would continue to focus on tariff developments with potential Chinese concessions being the next major issue.
As a result, he expected the ringgit to continue to strengthen in the near term.
Meanwhile, the ringgit was mostly traded lower against other major currencies.
It strengthened against the Japanese yen, rising to 2.8660/8792 from 2.8838/8898 on Monday. However, it depreciated against the euro, falling to 4.5969/6175 from 4.5747/5839 and weakened against the British pound, falling to 5.5340/5589 from 5.4966/5077.
The ringgit also experienced mixed movements against Asean currencies.
It rose against the Philippine peso to 7.58/7.62 from 7.62/7.64 but weakened against the Singapore dollar, Thai baht and Indonesian rupiah.
