As 2025 progresses, the Malaysian ringgit (MYR) is experiencing fluctuations against the US dollar (USD), reflecting a complex economic landscape. On January 13, 2025, the ringgit opened lower at 4.5100/5185 against the dollar, a decline from the previous close of 4.4945/5000. This drop was largely attributed to the robust performance of the US labor market, which added 256,000 jobs in December, significantly exceeding the estimated 160,000 jobs [444e901e].
However, on January 14, 2025, the ringgit steadied at around the 4.50 level, closing at 4.5035/5100, slightly up from 4.5080/5120 the previous day. This rebound indicates a cautious optimism in the market, despite the earlier decline [071d9f00]. Market sentiments remain cautious as the US Federal Reserve is expected to keep the Fed Funds Rate steady during the Federal Open Market Committee meeting scheduled for January 28-29, 2025 [071d9f00].
On January 15, 2025, the ringgit traded at 4.5000/5080 against the US dollar, slightly higher than the previous day's close of 4.5035/5100. This increase was influenced by a retreat of the dollar, attributed to reports of gradual tariff implementations and a dip in US wholesale inflation. Stephen Innes from SPI Asset Management noted this marked the dollar's first decline in six sessions [ccae18e5]. US President-elect Donald Trump's team is considering a 2-5% monthly tariff increase, which has raised concerns over US consumer price inflation and a potential 3% inflation rate for December [ccae18e5].
The strength of the US dollar is further evidenced by the US Dollar Index (DXY), which reached 109.956 points on January 14, having peaked at 110.163 points the previous night. However, it has since dropped to 109.273 points, influenced by the aforementioned economic factors [071d9f00][ccae18e5]. Dr. Mohd Afzanizam Abdul Rashid from Bank Muamalat Malaysia Bhd has indicated that the ringgit may remain around RM4.50 to RM4.51 until global policy clarity improves [ccae18e5].
On January 16, 2025, the ringgit opened at 4.4950/5045 against the US dollar, slightly higher than the previous day's close of 4.4970/5010. However, it ultimately eased against the dollar, closing at 4.5005/5050. Stephen Innes highlighted a lack of buying momentum and uncertainty surrounding potential US Federal Reserve rate cuts due to a 3.0% Consumer Price Index [35db5532]. Despite this, the ringgit appreciated against the euro (4.6283/6329) and the British pound (5.4888/4943), but fell against the Japanese yen (2.8914/8945). It showed mixed performance against ASEAN currencies, depreciating against the Thai baht (12.9941/13.0127) while appreciating against the Indonesian rupiah (274.7/275.2) [35db5532].
On January 17, 2025, the ringgit traded at 4.4900/5050 against the US dollar, marking the fourth consecutive day of gains. This improvement comes despite mixed market conditions due to ongoing inflation concerns. Recent US economic data showed December retail sales at 0.4% month-on-month, below the expected 0.6%, and initial jobless claims at 217,000, exceeding the anticipated 210,000 [c39a186f]. The US Dollar Index fell to 108.957 points, reflecting easing inflationary pressures in both the UK and US, as noted by SPI Asset Management's Stephen Innes [c39a186f]. The ringgit also strengthened against the euro, Japanese yen, Singapore dollar, and Philippine peso, although it weakened against the British pound and Thai baht [c39a186f].
As of January 19, 2025, Kenanga Investment Bank Bhd predicts that the ringgit will likely trade around 4.50 against the US dollar next week, as markets prepare for Donald Trump's inauguration on January 20, 2025. The US dollar remains firm, keeping the ringgit in a narrow range of 4.50 to 4.51. The ringgit has depreciated to 4.5040/5085 from 4.4945/5000 a week ago, while the US Dollar Index peaked at 110.0 on January 15, 2025, before easing to 109.0. The ringgit's performance has varied against major currencies, gaining against the British pound but losing to the Japanese yen and euro, with mixed results against ASEAN currencies [05ee57f6].
Analysts are closely monitoring upcoming economic indicators, including the US inflation report and Federal Reserve officials' speeches, as these will be crucial in determining the trajectory of the ringgit and other currencies. The interplay of domestic and international economic factors will be vital in shaping the performance of the ringgit in the coming months. While the recent US labor market data has exerted downward pressure on the ringgit, its recent stability suggests a potential for recovery, contingent upon broader economic conditions and market sentiment [444e901e][071d9f00].