Ringgit Gains as AI Investment Fears Damp US Dollar Strength

The ringgit opened higher on Friday, trading near 4.0785 against the US dollar after the greenback weakened following a drop in equity markets. Economist Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia Bhd said the rally reflected investor scepticism about the speed of returns from AI-related investments. He added that lower yields on two- and ten-year US Treasury bonds, down 16 and 17 basis points respectively, lessened the likelihood of an imminent Federal Reserve rate increase, contributing to a 0.15% dip in the US Dollar Index.

While the ringgit edged up versus the euro, it slipped slightly against the yen and the pound, and displayed varied performance against ASEAN currencies, gaining against the Thai baht and Indonesian rupiah but easing versus the Singapore dollar. Overall, market sentiment remained defensive, keeping the ringgit within a narrow trading range.