Kuala lumpur: The ringgit opened firmer against the US dollar on Tuesday, supported by improved risk sentiment, although caution lingered in global markets amid the ongoing US-Iran conflict, an analyst said. At 8 am, the local currency strengthened to 3.9420/9605 against the greenback from Monday's close of 3.9590/9655.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that US equities rebounded while US Treasury yields declined and Brent crude prices fell below US$100 per barrel after US President Donald Trump suggested that the conflict in Iran could soon come to an end. Despite uncertainties about the sustainability of these developments, equities showed a positive reaction.
Dr Mohd Afzanizam also pointed out discussions among G7 countries regarding the release of strategic oil reserves, indicating concerns over the potential economic impact of the war in Iran. On Monday, the ringgit had closed 0.36 percent weaker against the US dollar at RM3.9623, while the US Dollar Index (DXY) remained elevated at 99.175 points.
He further noted that although the decline in Brent crude prices was a positive sign, questions remained about the longevity of this trend, especially with Iran's installation of a new Supreme Leader who is likely to maintain a hardline stance on the war. Consequently, expectations were set for the ringgit to trade within a narrow range for the day.
At the opening, the ringgit traded lower against a basket of major currencies, except for the Japanese yen, against which it appreciated to 2.4967/5086 from 2.4992/5035 at Monday's close. It eased against the British pound to 5.2910/3158 from 5.2809/2896 and fell against the euro to 4.5786/6001 from 4.5738/5813 previously.
Meanwhile, the local currency showed gains against most ASEAN currencies but depreciated versus the Thai baht to 12.4095/4787 from 12.3345/3617 on Monday. The ringgit strengthened against the Philippine peso to 6.62/6.66 from 6.65/6.67, edged up versus the Singapore dollar to 3.0910/1058 from 3.0925/0978, and gained against the Indonesian rupiah to 232.5/233.7 from 233.5/234.0 previously.