Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid noted that US president Donald Trump’s administration will impose a 25% tariff on steel and aluminium imports from all countries.
“The move will certainly result in greater uncertainties in the currency market, with the US dollar continuing to be in high demand,” he told Bernama.
Additionally, he said the stable US labour market conditions also lent strong support to the greenback.
It was reported that the US nonfarm payrolls (NFP) rose by a lower-than-expected 143,000 in January versus consensus estimates of 170,000.
However, December’s NFP was revised upwards, from 256,000 to 307,000, while the unemployment rate fell further to 4% in January from 4.1% in the preceding month, suggesting that the US labour market remains resilient.
Afzanizam said for this week, the focus will be on Federal Reserve (Fed) chair Jerome Powell’s testimony to the US Congress, which will shed more light on how the Fed will assess the current policy changes in respect to tariffs and the impact it may have on the broader US economy.
“It is likely that the Fed will maintain its restrictive stance and is not about to cut the interest rate further in the first half of this year (H1 2025),” he added.
At 6pm, the ringgit slid to 4.4680/4.4730 against the US dollar from last Friday’s close of 4.4375/4.4420.
Meanwhile, the ringgit traded lower against other major currencies.
It fell against the Japanese yen to 2.9352/2.9387 from 2.9217/2.9249 at the close last Friday, slipped against the euro to 4.6128/4.6179 from 4.6101/4.6148 last week, and depreciated against the British pound to 5.5430/5.5492 from 5.5278/5.5334 previously.
The local note was also weaker against Asean currencies.
It was lower against the Singapore dollar to 3.3006/3.3048 from 3.2866/3.2901 at the close last Friday, declined against the Indonesian rupiah to 273.1/273.5 from 272.4/272.9 last week, and eased against the Philippine peso to 7.69/7.70 from last Friday’s close of 7.65/7.66.
However, the ringgit strengthened against the Thai baht to 13.1768/13.1986 from 13.1853/13.2041 previously.