The ringgit opened mixed on Friday, strengthening against most major currencies but easing slightly against the US dollar as investors adopted a cautious stance amid escalating tensions between the United States and Iran.
At 8am, the local currency slipped to 4.0430/0500 against the greenback from Thursday’s close of 4.0425/0470.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said investors were closely watching Washington’s next move as the US government was expected to announce measures aimed at further isolating Iran economically.
He said the geopolitical developments had pushed Brent crude oil prices up 1.75% to US$93.22 a barrel.
At the same time, the US government was expanding efforts to conduct buybacks of US Treasury securities in an attempt to contain the rise in Treasury yields, he said.
The yield on the 30-year US Treasury rose six basis points to 5.25%.
Mohd Afzanizam said one of the key concerns for markets was how the US intended to economically isolate Iran and whether such measures could lead to additional protectionist policies affecting countries that trade with Tehran.
Against this backdrop, he expects the ringgit to trade between RM4.04 and RM4.06 against the US dollar during the day.
Despite its softer opening against the greenback, the ringgit advanced against several major currencies.
It strengthened against the Japanese yen to 2.5445/5491 from 2.5527/5557 at Thursday’s close, while appreciating against the British pound to 5.5159/5254 from 5.5164/5225.
The local currency also improved against the euro to 4.7251/7332 from 4.7322/7374 previously.
Performance against regional currencies was mixed.
The ringgit gained against the Singapore dollar to 3.1797/1855 from 3.1813/1851, but weakened against the Thai baht to 12.3120/3400 from 12.3014/3211.
It was little changed against the Indonesian rupiah at 227.8/228.2 compared with 227.7/228.1, and was almost flat against the Philippine peso at 6.56/6.57 from 6.55/6.57.
