The ringgit opened marginally higher against the US dollar on Tuesday, supported by positive sentiment surrounding Budget 2027, although escalating geopolitical tensions and concerns over US inflation could limit further gains.
At 8am, the local currency strengthened slightly to RM4.0815/4.0900 against the US dollar, compared with Monday’s closing rate of RM4.0820/4.0865, according to Bernama in a report published by The Star at 8.52am. These are opening market quotes, rather than the official reference rates published by Bank Negara Malaysia (BNM).
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said heightened geopolitical risks in West Asia and expectations of higher US inflation could support the greenback. He pointed to the situation in Riyadh, Saudi Arabia, following missile attacks, warning that the conflict could potentially widen and disrupt crude oil supplies further.
Afzanizam noted that Brent crude oil prices had risen by 1.38% to US$106.16 per barrel, while the US Dollar Index (DXY) climbed by 0.35% to 102.573 points. Meanwhile, consensus estimates indicated that US consumer price index inflation could rise to 3.6% in September, up from 3.4% in August.
Against other major currencies, the ringgit strengthened against the British pound, trading at RM5.3913/5.4025 compared with RM5.4017/5.4077 at Monday’s close. It also gained against the euro, improving to RM4.5545/4.5640 from RM4.5637/4.5687 previously. However, it weakened slightly against the Japanese yen, with the rate moving to RM2.5748/2.5803 per 100 yen from RM2.5739/2.5769.
Regional currency movements were mixed. The ringgit edged higher against the Singapore dollar to RM3.1864/3.1933 from RM3.1873/3.1911 and strengthened against the Thai baht to RM12.1318/12.1628 per 100 baht, compared with RM12.1391/12.1568 previously.
Against the Indonesian rupiah, the ringgit traded at RM227.8/228.4 per 100 rupiah, compared with RM227.9/228.2 at Monday’s close. It was almost unchanged against the Philippine peso at RM6.50/6.52 per 100 pesos, compared with RM6.50/6.51 previously.
Afzanizam expects the ringgit to continue trading within a narrow range as investors weigh domestic fiscal developments against external risks. Market attention is likely to remain on developments in West Asia, movements in crude oil prices and the upcoming US inflation report, which could influence expectations for the Federal Reserve’s monetary policy.
