Ringgit opens higher against US dollar as oil prices ease

The Malaysian ringgit opened higher against the US dollar and major currencies on Friday, buoyed by positive market sentiment as worries over West Asia crude oil supply subsided. At 8am, the local currency rose to 4.0955-4.1015 against the greenback, up from Thursday's close of 4.0965-4.1010. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid attributed this improvement in sentiment to reports that Saudi Arabia had started repairing its damaged East-West pipeline, and ongoing tanker movements through the Strait of Hormuz, which eased concerns about oil supply.

Consequently, Brent crude oil prices fell by 0.95% to US$104.82 per barrel, while US Treasury yields declined, with the 2-year and 10-year notes falling by 7 basis points each to 4.67% and 4.94%, respectively. The focus now shifts to the Bank of Japan's (BOJ) monetary policy decision later on the same day, with expectations of a 25-basis-point rate hike to 1.25%.

Market participants will be closely watching the BOJ's assessment of the economy and the tone of the policy statement, as a more aggressive stance could lead to further yen carry trade unwinding and increased market volatility. As a result, Afzanizam forecasts that the ringgit will remain within a narrow range throughout the day, with traders closely monitoring this crucial event.

Throughout the morning, the ringgit traded higher against several major currencies. It gained against the euro to 4.7000-4.7069 from Thursday's close of 4.7003-4.7055, strengthened against the yen to 2.6228-2.6268 from 2.6305-2.6336, and advanced against the British pound to 5.4704-5.4784 from 5.4877-5.4937. However, the local currency traded mixed against its ASEAN counterparts, appreciating against the Singapore dollar to 3.2096-3.2146, but falling against the Thai baht to 12.3043-12.3279.

The ringgit remained unchanged against the Philippine peso at 6.53-6.54 and the Indonesian rupiah at 230.7-231.1.