Dollar Retreats After Election Surge
KUALA LUMPUR: The Malaysian ringgit showed a slight recovery against the US dollar on Tuesday after a brief retreat from the dollar’s recent surge driven by election-related volatility. At 8:05 a.m., the ringgit stood at 4.4080/4200, slightly stronger than the previous day’s closing of 4.4090/4120.
Market Reacts to Speculation on Future Policies
Stephen Innes, managing partner at SPI Asset Management, observed that the dollar’s gains were primarily driven by market speculations about potential economic policies under a second Trump term. This speculation is seen as potentially detrimental to ASEAN’s export-driven economies. However, the ringgit’s recovery suggested that traders were reassessing their positions in the aftermath of the surge.
Trade Speculation Fuels FX Caution
Innes also mentioned that the dollar’s rally was partly due to rumors regarding the return of Robert Lighthizer, former trade representative under President Trump. Although these rumors were quickly dismissed, FX traders remained alert, fearing that a return to a more aggressive trade stance could spark further volatility in the Asian FX markets.
