KUALA LUMPUR: The ringgit closed higher against the US dollar and was mostly stronger against regional currencies on Tuesday, supported by improved market sentiment amid easing geopolitical tensions in West Asia.
At 6 pm, the local note appreciated to 4.0580/0630 against the US dollar from Monday’s close of 4.0715/0760.
SPI Asset Management managing partner Stephen Innes said that broader regional risk appetite has improved following the tentative truce between Iran and Israel.
"The truce has resulted in easing in oil prices, which helped set a more constructive tone across asset classes, with Brent crude oil retracing part of its previous gains and easing pressure on regional risk assets,” he told Bernama.
According to media reports on Monday, Iran announced that it would halt its attacks for the time being but warned that it would resume attacks if Israel engaged in further acts of aggression, including military actions in Lebanon.
Iran and Israel have halted their overnight attacks, marking the first direct exchange of strikes since a ceasefire took effect in early April.
At the time of writing, Brent crude oil declined by 1.93 per cent to US$92.43 per barrel.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said regional currencies also strengthened against the US dollar, buoyed by easing tensions in West Asia and supported by stronger-than-expected economic data from China.
"China’s trade in May also surprised on the upside with total exports growing 19.4 per cent year-on-year versus consensus estimates of 15.0 per cent, suggesting that global demand remains positive despite higher fuel prices.
"Additionally, the United States Consumer Price Index (CPI) for May, which will be released on June 10 (US time), will be closely monitored ahead of the Federal Open Market Committee’s (FOMC) meeting next week,” he said.
The ringgit traded mostly lower against a basket of major currencies.
It rose against the Japanese yen to 2.5332/5365 from 2.5445/5475 at Monday’s close, but eased versus the British pound to 5.4329/4395 from 5.4249/4309 yesterday, and turned slightly lower vis-a-vis the euro at 4.6915/6972 from 4.6867/6919 previously.
However, the local currency mostly strengthened against regional peers.
It gained versus the Singapore dollar to 3.1563/1604 from 3.1577/1614 on Monday, and was up against the Thai baht at 12.3531/3732 from 12.3942/4128 previously.
It strengthened against the Philippine peso to 6.59/6.60 from 6.60/6.61 yesterday, but it was slightly lower against the Indonesian rupiah to 224.7/225.1 versus 223.8/224.2 previously. - Bernama
