Kuala lumpur: The ringgit extended its gains to close higher for a second consecutive day against the US dollar and other major currencies on Tuesday, supported by Malaysia's stronger-than-expected trade performance, despite persistent geopolitical uncertainties.
According to BERNAMA News Agency, at 6 pm, the local currency rose to 4.0870/0910 against the greenback from yesterday's close of 4.0895/0950. SPI Asset Management managing partner Stephen Innes noted that a rebound in semiconductor stocks across Asia provided additional support, creating a favorable regional environment for the local currency.
"The resilience is more notable given that the US dollar is currently trading stronger across the G10 board, while geopolitical uncertainty remains elevated," Innes told Bernama. He anticipates the ringgit to maintain a steady trade with a slightly positive bias for the remainder of the week, barring any significant escalation in geopolitical risks.
Innes further added, "It is a slow US macroeconomic week and foreign exchange volatility is extremely low. The only issue could be a more meaningful escalation in West Asia and another surge in oil prices, but not the market's base case at this time. In that scenario, the US dollar would likely pick up a meaningful geopolitical safe-haven bounce."
Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted that despite the ringgit's positive performance today, market participants remained cautious due to ongoing hostilities between the US and Iran, which could disrupt vessel traffic flow in the Strait of Hormuz. "In the absence of critical data points, market participants will observe the event risk surrounding the US-Iran war as it has direct implications for crude oil prices," he explained.
Meanwhile, the ringgit traded higher against a basket of major currencies at today's close. It appreciated against the euro to 4.6682/6727 from 4.6743/6806 at Monday's close, strengthened against the Japanese yen to 2.5123/5148 from 2.5177/5212, and rose against the British pound to 5.4868/4922 from 5.5049/5123 previously.
The local note showed mixed performance against regional currencies. It depreciated against the Singapore dollar to 3.1682/1716 from 3.1677/1722 and fell against the Indonesian rupiah to 228.4/228.8 from 227.8/228.2 at yesterday's close. However, it advanced against the Thai baht to 12.1420/1579 from 12.1556/1759 and climbed against the Philippine peso to 6.62/6.63 from 6.63/6.64 on Monday.