KUALA LUMPUR: The ringgit opened firmer against the US dollar on Tuesday, supported by improved risk sentiment, although caution lingered in global markets amid the ongoing US-Iran conflict, an analyst said.
At 8 am, the local currency strengthened to 3.9420/9605 against the greenback from Monday's close of 3.9590/9655.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said US equities rebounded while US Treasury yields declined and Brent crude prices fell below US$100 per barrel after US President Donald Trump said the war in Iran could end soon.
"However, it remains to be seen how sustainable such promises are, but equities rallied nonetheless.
"There were also discussions among G7 countries about releasing strategic oil reserves, suggesting concerns over the potential impact of the war in Iran on their respective economies,” he told Bernama.
Mohd Afzanizam noted that the ringgit had closed 0.36 per cent weaker against the US dollar at RM3.9623 on Monday, while the US Dollar Index (DXY) remained elevated at 99.175 points.
"The decline in Brent crude prices is positive, but the main question is how sustainable the fall will be. Iran has installed a new Supreme Leader, and a hardline stance on the war is likely to be maintained.
"As such, we expect the ringgit to trade within a narrow range today,” he said.
At the opening, the ringgit traded lower against a basket of major currencies, except for the Japanese yen, against which it appreciated to 2.4967/5086 from 2.4992/5035 at Monday’s close.
It eased versus the British pound to 5.2910/3158 from 5.2809/2896 and fell against the euro to 4.5786/6001 from 4.5738/5813 previously.
Meanwhile, the local note traded higher against most ASEAN currencies, although it depreciated versus the Thai baht to 12.4095/4787 from 12.3345/3617 on Monday.
The ringgit strengthened against the Philippine peso to 6.62/6.66 from 6.65/6.67, edged up versus the Singapore dollar to 3.0910/1058 from 3.0925/0978, and gained against the Indonesian rupiah to 232.5/233.7 from 233.5/234.0 previously. - Bernama
