KUALA LUMPUR: The ringgit strengthened against the US dollar but was mixed against other currencies in early trade today, amid cautious sentiment over oil price volatility and developments in the Strait of Hormuz, an analyst said.
At 8.03 am, the local currency stood at 3.9475/9540 against the greenback, compared with 3.9505/9550 at Tuesday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit is expected to trade within a narrow range as market participants await further clarity on the situation in the Strait of Hormuz.
At the time of writing, oil prices remained volatile following the United Arab Emirates’ exit from the OPEC alliance. West Texas Intermediate fell 0.83 per cent to US$99.10 per barrel, while Brent crude slipped 0.59 per cent to US$110.60 per barrel.
"News of the UAE’s departure from OPEC in May, after more than six decades of membership, is set to reshape the oil and gas landscape. The country will be free to determine its output levels in line with its investment in the sector,” Mohd Afzanizam told Bernama.
However, for now, the focus is on supply cuts amid the war in Iran, which has disrupted the flow of oil and gas through the Strait of Hormuz, he added.
Mohd Afzanizam said US data showed the Conference Board’s Consumer Confidence Index rose to 92.8 in April following a ceasefire in the Iran conflict.
However, he added that expectations of a US recession over the next 12 months have risen, while plans to purchase big-ticket items have declined.
"Tonight, the Federal Open Market Committee’s decision will be closely watched for signals on whether policymakers are becoming more wary of growth prospects amid a higher inflation environment,” he said.
At the opening, the ringgit was mixed against a basket of major currencies.
It rose against the Japanese yen to 2.4740/4782 from Tuesday’s 2.4756/4785, but weakened against the British pound to 5.3394/3482 from 5.3292/3353, and slipped against the euro to 4.6261/6337 from 4.6189/6242.
The local currency traded mostly higher against ASEAN peers.
It edged up against the Singapore dollar to 3.0937/0990 from 3.0943/0983 at Tuesday’s close and strengthened against the Thai baht to 12.1484/1759 from 12.1494/1685.
The ringgit was little changed against the Indonesian rupiah at 228.9/229.4 and was steady against the Philippine peso at 6.44/6.45 from 6.44/6.46. - Bernama
