As the US dollar consolidates its strength amidst growing uncertainties linked to the US debt ceiling talks, the Malaysian ringgit opened at a lower position, according to financial analysts.
The ringgit stood at 4.5790/5820 against the dollar, slightly down from the previous day’s closing rate of 4.5700/5750. This shift is largely attributable to the escalating tensions around the US government debt ceiling, which are yet to be resolved.
Dr. Mohd Afzanizam Abdul Rashid, chief economist and social finance head at Bank Muamalat Malaysia Bhd, highlighted the potential consequences of a failure to raise the debt limit, which could lead to a default on debt obligations. With the US government debt at 129% of its gross domestic product, any default could create shockwaves through global markets.
Despite this looming threat, the US dollar continues to hold its ground as a safe haven currency. During times of uncertainty, investors lean towards the security of the dollar, keeping it resilient. The US Dollar Index (DXY) maintains a high position of 103.488 points, exerting pressure on the ringgit.
Meanwhile, the ringgit is facing challenges against a range of major currencies. Notably, it weakened against the British pound, depreciated against the euro, and fell lower against the Japanese yen. Additionally, the local note also eased against other Asean currencies including the Indonesian rupiah, the Singapore dollar, the Philippine peso, and the Thai baht.
Given these circumstances, the ringgit’s weak performance is expected to continue, currently trading at 4.5725 against the dollar with an immediate resistance level pegged at 4.6257.
This news is based on an article published by theedgemalaysia.com.
