Ringgit eases against greenback amid AI investment pullback
The ringgit's weakness was largely driven by broader risk aversion, particularly as investors pulled back from AI-related investments, says analyst.
KUALA LUMPUR: The Malaysian ringgit weakened against the US dollar recently due to a decline in global artificial intelligence (AI)-linked trades and investments. Stephen Innes, managing partner at SPI Asset Management, attributed the ringgit's decline to wider risk aversion, especially as investors unwound AI-related investments.
Malaysia has profited from the worldwide AI investment surge, particularly through its semiconductor sector and technology-linked investments. However, when investors start pulling out of the AI trade, the ringgit can face pressure, even when the US dollar is weakening. Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, stated that the ringgit traded within a narrow range against the greenback due to worries about an imminent AI investment bubble, the approaching US midterm elections, and the forthcoming US jobs data.
He added that the mixed signals among Wall Street firms regarding AI infrastructure could indicate a missed chance for further investment gains. As of 6 PM, the local currency fell to 4.0735/4.0775 against the US dollar from its previous close of 4.0695/4.0735. Against other major currencies, the ringgit traded mostly stronger, but was weaker compared to its ASEAN counterparts.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
