Ringgit Strengthens as US-EU Tensions Escalate

KUALA LUMPUR: The ringgit extended its gains to open firmer on Tuesday, tracking a weaker US Dollar Index (DXY) as tensions between the United States and the European Union intensified following renewed remarks by the administration of US President Donald Trump over Greenland. At 8 am, the local currency strengthened to 4.0475/0575 against the greenback from Monday’s close of 4.0520/0570. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the DXY fell 0.35 per cent to 99.050 points, signalling a clear shift into risk-off sentiment, with gold emerging as a safe haven for traders and investors. He also noted that the International Monetary Fund (IMF) has raised its 2026 global gross domestic product (GDP) growth forecast by 0.2 percentage points to 3.3 per cent, supported by stronger investment in artificial intelligence, accommodative monetary conditions and fiscal stimulus, which are expected to help offset weaknesses stemming from disruptions to trade policies. "On a similar note, Malaysia’s 2026 GDP growth forecast was revised up by 0.3 percentage points to 4.3 per cent. As such, we expect the ringgit to stay in rangebound trade in light of the risk-off mode on the positive assessment by the IMF on the global economic conditions,” he told Bernama. The ringgit was mixed against a basket of major currencies. It rose against the Japanese yen to 2.5591/5656 from 2.5657/5692 on Monday, edged up against the British pound to 5.4313/4448 from 5.4321/4388, but was marginally lower versus the euro to 4.7109/7225 from 4.7100/7159. The local note was mostly firmer against ASEAN currencies. It gained against the Singapore dollar to 3.1491/1571 from 3.1521/1562, appreciated versus the Thai baht to 12.9454/9886 from 12.9623/9845 and it strengthened against the Indonesian rupiah to 238.7/239.4 from 239.0/239.3. However, it was little changed versus the Philippine peso, at 6.81/6.83 from 6.81/6.82. - Bernama