KUALA LUMPUR: The ringgit strengthened against regional peers at the close as investors’ risk appetite improved, underpinned by growing confidence in safe passage through the Strait of Hormuz.
At 6 pm, the local currency also firmed to 3.9540/9575 against the US dollar from 3.9690/9740 at Thursday’s close.
The local market was closed on May 1 for the Labour Day public holiday.
SPI Asset Management managing partner Stephen Innes said the United States’ signal that it is preparing to safeguard energy shipments points to easing geopolitical tensions, giving risk assets room to recover.
According to reports, President Donald Trump said the United States would begin escorting neutral foreign vessels through the Strait of Hormuz from Monday, describing the move as a "humanitarian gesture” to protect countries caught in a conflict not of their making.
He said the United States would use its "best efforts” to guide ships and crews through the restricted passage, adding that vessels would not return until conditions were safe for navigation.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said shipping executives remain cautious about the initiative, given limited details.
"In addition, such an act could provoke Iranian forces, leading to further escalation with the US.
"As such, traders are likely to watch Bank Negara Malaysia’s Monetary Policy Committee meeting, particularly its latest assessment of the Malaysian economy,” he told Bernama.
At the close, the ringgit traded mostly lower against a basket of major currencies.
It slipped against the Japanese yen to 2.5186/5210 from 2.4907/4942 at last Thursday’s close, depreciated versus the British pound to 5.3612/3660 from 5.3593/3661, but rose against the euro to 4.6329/6370 from 4.6417/6476 previously.
However, the local currency was firmer against regional peers.
It strengthened against the Singapore dollar to 3.1019/1049 from 3.1061/1103 at last Thursday’s close, gained against the Thai baht to 12.1460/1631 from 12.1711/1932, edged up versus the Indonesian rupiah to 227.3/227.6 from 228.7/229.2, and advanced against the Philippine peso to 6.42/6.43 from 6.45/6.47 previously. - Bernama
