Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said conditions currently favour the greenback as the US Federal Reserve (Fed) is expected to ease its monetary policy in 2025 more gradually.

“The prospects for lower rate cuts in 2025 weighed heavily on various currencies including the ringgit as the US economy remains resilient and has fared well compared to other developed countries.

“Clearly, the US dollar has performed well despite the Fed’s decision to cut interest rates since September 2024,” he told Bernama.

Afzanizam noted that the local note was on a firmer footing against the greenback during the early morning session, however, it gradually weakened while the US Dollar Index (DXY) stayed elevated throughout the day.

Meanwhile, SPI Asset Management managing partner Stephen Innes said Asian foreign exchange markets are trading cautiously with only three weeks to go until the US presidential inauguration, as traders focus on the looming changes in Washington.

At 6pm, the ringgit slid to 4.4690/4.4745 against the greenback, compared with yesterday’s close of 4.4645/4.4700.

The ringgit closed mostly higher against other major currencies.

It went down against the Japanese yen to 2.8529/2.8566 from yesterday’s close of 2.8278/2.8314 but appreciated against the British pound to 5.6095/5.6164 from 5.6146/5.6215, and was higher vis-a-vis the euro at 4.6549/4.6606 from 4.6583/4.6640 previously.

At the same time, the local note traded mixed against Asean currencies.

It strengthened versus the Singapore dollar to 3.2824/3.2867 from 3.2890/3.2935 at the previous close and rose against the Thai baht to 13.0566/13.0830 from 13.0905/13.1139 yesterday.

However, it was lower against the Indonesian rupiah at 276.9/277.5 from 276.5/277 and remained unchanged versus the Philippines peso at 7.70/7.72.