Kuala lumpur: The ringgit opened slightly higher against the US dollar on Monday as anticipation grew for the release of key economic data from the United States, amid easing tensions in West Asia. At 8 am, the local currency improved to 4.0805/0900 against the greenback, up from last Friday's close of 4.0835/0875.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist Dr. Mohd Afzanizam Abdul Rashid indicated that the US Institute for Supply Management (ISM) Manufacturing PMI for July is set to be released tonight. The consensus estimate is at 54.0, a rise from June's reading of 53.3. This data release is being closely watched by markets.
Additionally, Mohd Afzanizam noted that uncertainties surrounding the West Asia conflict have influenced market sentiment. Brent crude oil saw a significant rise of 4.59 percent, reaching US$88.10 per barrel. Reports over the weekend suggested that President Donald Trump canceled planned military strikes against Iran, with expectations that both countries might soon reach an agreement on the nuclear program and the full reopening of the Strait of Hormuz.
Despite these developments, Mohd Afzanizam mentioned that the market remains cautious, with the local currency expected to trade within a narrow range of RM4.07 to RM4.09 throughout the day.
Meanwhile, SPI Asset Management's managing partner, Stephen Innes, explained that the US dollar weakened following Trump's decision to cancel the strike on Iran. This move has led to lower oil prices and inflation breakevens, which consequently pulled down the US interest-rate curve. Innes added that this scenario could be favorable for the ringgit and, more generally, for risk assets across Asia.
In contrast, the ringgit traded lower against a selection of major currencies upon opening. It slipped against the Japanese yen, dropping to 2.5880/5942 from 2.5520/5548 at last Friday's close, fell against the euro to 4.7089/7199 from 4.6981/7027, and depreciated against the British pound to 5.5038/5166 from 5.4923/4977.
Against regional currencies, the ringgit showed mixed performance. It strengthened against the Indonesian rupiah to 226.4/227.0 from 226.6/226.8 and gained versus the Thai baht to 12.2211/2558 from 12.2264/2435. However, it softened against the Singapore dollar to 3.1844/1921 from 3.1823/1856 and remained relatively unchanged against the Philippine peso, trading at 6.66/6.68 from 6.66/6.67.