Ringgit Holds Firm Above 3.92 as Investors Weigh Middle East Risks and Oil Surge
KUALA LUMPUR: The Malaysian ringgit opened slightly stronger against the US dollar on Tuesday, maintaining its resilience despite persistent risk-off sentiment driven by ongoing geopolitical tensions in the Middle East.
At 8am, the local currency traded at 3.9210/9340 against the greenback, compared with Monday’s close of 3.9225/9295. The modest gain comes as investors remain cautious amid heightened military conflict in the region and volatile oil prices.
According to Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid, crude oil prices have climbed sharply due to escalating geopolitical tensions. However, market attention is gradually shifting toward how global central banks may respond to rising inflationary pressures, particularly at a time when global economic growth remains subdued.
The US Dollar Index (DXY) hovered at 98.381 points, slightly higher than last week’s level of around 97 points, indicating continued support for the greenback.
Despite concerns over rising oil prices and inflation risks, the ringgit has remained relatively steady. The currency closed 0.9 percent higher on Monday compared with last Friday, signaling sustained investor confidence.
Dr. Afzanizam expects the ringgit to trade above the RM3.90 level against the US dollar in the near term, likely fluctuating within a range of RM3.90 to RM3.95 unless there are clear signs of de-escalation in the Middle East conflict.
In commodity markets, West Texas Intermediate crude slipped 0.24 percent to US$71.06 per barrel, while Brent crude surged 6.68 percent to US$77.74 per barrel, reflecting supply concerns tied to geopolitical instability.
Performance Against Major Currencies
In early trade, the ringgit was mostly firmer against major currencies. It strengthened against the euro to 4.5852/6004 from 4.6031/6113 previously and rose against the Japanese yen to 2.4928/5014 from 2.4984/5032.
However, the local currency weakened slightly versus the British pound, trading at 5.2573/2747 compared with 5.2460/2553 at Monday’s close.
Mixed Trend Against ASEAN Peers
Against regional currencies, the ringgit posted mixed results. It edged up against the Singapore dollar to 3.0809/0916 and was marginally stronger versus the Philippine peso at 6.73/6.76.
The currency was little changed against the Indonesian rupiah at 232.4/233.3 but weakened against the Thai baht to 12.5012/5539 from 12.4682/4980 previously.
Market participants are expected to remain cautious in the coming days, closely monitoring geopolitical developments and signals from major central banks that could influence currency movements globally.