"Dollar/ringgit is under a lot of upward pressure... Especially getting so close to the 4.5 levels, there's a lot of nervousness among the investors," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore. He added that the ringgit, which is particularly vulnerable to rises in US interest rates because of the high foreign ownership of Malaysian bonds, could fall to 5.0 versus the dollar by the end of this year.
The ringgit and other Asian currencies have declined broadly since early November as US bond yields and the dollar jumped on expectations that President-elect Donald Trump's proposals for infrastructure spending and tax cuts will boost US economic growth and inflation.
Downward pressure on Asian currencies has persisted after the US Federal Reserve raised interest rates in December and signalled three hikes in 2017. The dollar index last stood at 103.06. It had risen to 103.82 on Tuesday, its strongest level since December 2002, after data showed solid growth in US manufacturing. The Thai baht eased 0.1 percent, pressured partly by outflows from Thai bonds, traders said.
Other Asian currencies showed resilience, however. The Chinese yuan rose 0.2 percent after the central bank set a stronger-than-expected daily trading midpoint and state banks sold dollars. The Indian rupee edged higher, partly due to dollar-selling by local exporters.