Kuala lumpur: The ringgit opened flat against the US dollar but rose against other major currencies, with investors still weighing the outcome of the Federal Open Market Committee (FOMC) meeting and Washington's reciprocal tariff measures, which take effect today. At 8 am, the local note stood at 4.2650/2850 against the US dollar, almost unchanged from Thursday's close of 4.2650/2730.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the newly announced tariff is likely to support the ringgit and boost investor sentiment. The United States recently announced a reduced tariff of 19 per cent on Malaysian imports, effective August 1, 2025. On July 7, US President Donald Trump stated that Washington would impose a 25 per cent tariff on all Malaysian products entering the country, separate from existing sectoral tariffs. This new rate, effective today, is one percentage point higher than the 24 per cent announced in April.
Mohd Afzanizam observed that the US Dollar Index (DXY) continued its upward trajectory, gaining 0.15 per cent to reach 99.968 points, buoyed by the tariff decision and a stronger-than-expected Personal Consumption Expenditures (PCE) price index, which rose to 2.6 per cent in June. He further highlighted that the data suggests persistent inflationary risks, which could prompt the Federal Reserve (Fed) to maintain the Fed Funds Rate at its current level during its September meeting.
Despite these developments, the ringgit weakened by 0.61 per cent yesterday, closing at RM4.2690. Mohd Afzanizam remarked that, following the FOMC meeting, the US dollar gained traction as the Fed continues to adhere to its restrictive policy stance to mitigate inflation risks.
At the market's opening, the ringgit showed strength against other major currencies. It appreciated against the Japanese yen to 2.8277/8411 from 2.8443/8498 on Thursday, advanced against the British pound to 5.6328/6592 from 5.6426/6532, and increased against the euro to 4.8711/8939 from 4.8766/8857.
The ringgit exhibited mixed performance against regional peers. It remained largely unchanged against the Philippine peso at 7.31/7.35 from 7.31/7.33 and was flat against the Indonesian rupiah at 259.1/260.5 from 259.1/259.7. The local note rose against the Thai baht to 13.0169/0876 from 13.0448/0753 and strengthened versus the Singapore dollar to 3.2856/3012 from 3.2889/2953.