KUALA LUMPUR: The ringgit opened lower against the US dollar today as investors stayed on the sidelines due to uncertainty surrounding the global economy and heightened trade tension involving the United States.
At 9 am, the ringgit was at 4.1750/1780 against the greenback from 4.1650/1690 at Friday’s close.
MIDF Research in its economic brief said the heightened trade tension between US and China has weakened the US consumers’ sentiment with long-term inflation expectations dropping to the lowest on record as the outlook for the economy dimmed amid President Donald Trump’s stepped-up trade war.
The trade war has also caused China’s industrial output growth in May to be at the weakest level since the beginning of 2002 at 5% year-on-year.
“The pressure from the US-China trade war which shows tariffs increased on China imports has affected major industrial production of China,” it said.
Meanwhile, a dealer said the trade tension between the US and China was not the only reason causing the investors to be wary, but tariff hike involving a trade dispute between India and the United States has also inflicted additional damage to the global economy.
“The negative pressure on trade is not good for the global economy,” he said.
Yesterday, India reportedly announced a retaliatory tariff on US goods such as apples, which will be hit with a 70% tariff, as well as almonds, lentils and several chemical products.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies.
It appreciated against the Singapore dollar to 3.0448/0481 from 3.0457/0491 from Friday’s close, higher at 5.2572/2618 from 5.2691/2759 against the pound and improved versus the euro to 4.6835/6873 from 4.6940/6989.
The local currency also inched up against the yen at 3.8430/8461 from 3.8490/8534.