KUALA LUMPUR: The ringgit opened higher against a basket of major currencies but weakened against the US dollar on Friday, as escalating tensions in West Asia dampened risk appetite, an economist said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Bernama that market sentiment has turned increasingly cautious, with investors adopting a risk-off stance and preferring to hold cash.
At 8 am, the local currency eased to 3.9275/9400 against the greenback from Thursday’s close of 3.9240/9280.
Brent crude prices surged 9.86 per cent to US$101.05 per barrel as the US-Iran war continues to dominate headlines, while US President Donald Trump vowed to dismantle the Iranian regime, saying the rising cost of oil was a secondary matter to him.
Meanwhile, Iran’s new Supreme Leader Mojtaba Khamenei would seek the closure of the Straits of Hormuz as part of the country’s war strategy.
"In addition, there is concern over private credit markets following higher redemptions among investors, while US Treasury yields moved higher as concerns over fiscal deficits mount following the ballooning cost of war.
"In short, risk-off sentiment has become prevalent and staying in cash is probably the best idea for fund managers,” he said.
He added that members of the US Federal Open Market Committee (FOMC) will reconvene next week to decide on the federal funds rate set by the Federal Reserve System.
Hence, markets will be observing their language for direction, he said.
The ringgit improved against the Japanese yen at 2.4666/4746 from 2.4720/4746 at Thursday’s close, gained against the British pound to 5.2436/2603 from 5.2554/2608 and rose against the euro to 4.5249/5393 from 4.5361/5408.
The local currency traded higher against most ASEAN currencies but was flat against the Indonesian rupiah at 232.5/233.3 from 232.2/232.6 previously.
It increased against the Thai baht to 12.2090/2554 from 12.3257/3452, climbed against the Philippine peso to 6.61/6.64 from 6.60/6.62 and edged up against the Singapore dollar to 3.0715/0817 from 3.0786/0820 at Thursday’s close. - Bernama
