KUALA LUMPUR: The ringgit closed higher against the US dollar on Monday as risk sentiment improved on news that the United States and Iran will sign a peace deal on Friday.
At 6 pm, the local note rose to 4.0485/0525 against the greenback from Friday's close of 4.0555/0600.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the looming peace agreement between the US and Iran had improved market sentiment and supported the ringgit.
"Positive developments in West Asia, particularly the growing momentum in peace talks between the US and Iran, have boosted market sentiment, with both countries expected to sign a memorandum of understanding (MOU) on a peace deal on June 19.
"The deal would pave the way for the reopening of the Strait of Hormuz, allowing the flow of crude oil, liquefied natural gas (LNG), and other commodities such as aluminium and urea,” he noted.
Mohd Afzanizam said that the anticipation of a restoration in oil supplies had improved risk appetite among traders and investors. "To some degree, this could lead to moderate inflation where the global central banks would not resort to further monetary tightening,” he added.
At the close, the ringgit was mostly higher against a basket of major currencies.
It appreciated against the Japanese yen to 2.5283/5309 from 2.5334/5364 at Friday's close and strengthened versus the British pound to 5.4355/4409 from 5.4429/4489. However, it slipped against the euro to 4.6987/7033 from 4.6979/7031.
Against regional currencies, the local note was mostly lower.
It weakened against the Thai baht to 12.4294/4474 from 12.4105/4288 at Friday's close and depreciated versus the Indonesian rupiah to 228.5/228.9 from 227.0/227.4.
The ringgit also eased against the Philippine peso to 6.69/6.70 from 6.67/6.68. However, it climbed against the Singapore dollar to 3.1580/1613 from 3.1602/1640. - Bernama
