Kuala lumpur: The ringgit opened higher against the US dollar on Monday, buoyed by improved market sentiment as investors remained optimistic about potential progress in negotiations between the United States and Iran. At the start of trading, the local currency rose to 3.9635/9705 against the greenback, compared to Friday's close of 3.9655/9700.
According to BERNAMA News Agency, there are ongoing reports suggesting that the United States and Iran are in discussions regarding a deal that could lead to the reopening of the Strait of Hormuz. This strategic global oil shipping route is critical as approximately 20 percent of the world's oil supply passes through it.
Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, noted that the US Dollar Index (DXY) experienced a 0.25 percent decline to 98.987 points, while the S and P 500 futures index saw a 0.61 percent increase to 7,536.50 points. These indicators demonstrate a risk-on sentiment among traders and investors. Meanwhile, West Texas Intermediate (WTI) and Brent crude oil prices dropped by more than five percent, settling at US$91.75 and US$98.33 per barrel, respectively.
Dr. Mohd Afzanizam added that the ringgit could appreciate further amid the improved market sentiment, potentially moving towards RM3.95 against the US dollar. He emphasized that the relatively better macroeconomic indicators, such as an improving current account surplus and a narrowing fiscal deficit in the first quarter of 2026, indicate that the risk of Malaysia becoming a twin-deficit economy remains low.
However, at the opening, the ringgit showed a mixed performance against a basket of major currencies. It weakened against the Japanese yen, slipping to 2.4934/4980 from 2.4925/4954 at Friday's close. Similarly, it declined against the British pound to 5.3432/3526 from 5.3245/3305 and against the euro to 4.6143/6225 from 4.6012/6064 previously.
The ringgit also had a varied performance against regional peers. It fell against the Singapore dollar to 3.1030/1090 from 3.0985/1023 at Friday's close and weakened versus the Thai baht to 12.1954/2248 from 12.1421/1611 previously. Conversely, it edged higher against the Indonesian rupiah to 223.7/224.2 from 223.8/224.1 and remained unchanged against the Philippine peso at 6.42/6.44.