The ringgit opened higher against the US dollar on Tuesday, supported by signs of progress in diplomatic negotiations between the United States (US) and Iran.
At 8am, the local currency strengthened to 4.0690/0750 against the greenback, compared with Monday’s closing rate of 4.0695/0735.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the diplomatic discussions between Washington and Tehran could potentially pave the way for the reopening of the Strait of Hormuz.
The positive developments also coincided with a sharp decline in crude oil prices, with Brent crude falling 8.12% to US$104.21 per barrel.
He also noted that lower yields from US Treasury bill auctions for three-month and six-month maturities indicated easing expectations of further interest rate hikes.
However, he cautioned that the situation in West Asia remained uncertain, with market participants continuing to monitor developments surrounding the US midterm elections.
Mohd Afzanizam expects the ringgit to trade within a narrow range on Tuesday as market sentiment remains cautious.
Against other major currencies, the ringgit strengthened against the euro to 4.5540/5607 from 4.5652/5697 at Monday’s close.
It also gained against the British pound to 5.4561/4642 from 5.4621/4675, but slipped against the Japanese yen to 2.5769/5809 from 2.5766/5793.
Against ASEAN currencies, the ringgit rose against the Singapore dollar to 3.1809/1858 from 3.1825/1862.
It was unchanged against the Indonesian rupiah at 224.1/224.5 and the Philippine peso at 6.39/6.41, but weakened against the Thai baht to 12.0634/0920 from 12.0496/0661.
The report was carried by Sinar Harian, citing Bernama.
