Ringgit closes slightly higher against US dollar amid cautious sentiment post Xi-Trump meeting

KUALA LUMPUR – The Malaysian ringgit closed slightly higher against the US dollar on Sept 22, maintaining a narrow trading range as investors remained cautious in the face of upcoming geopolitical events. The local currency reached 4.0730/0775 per US dollar by 6 pm, up from yesterday's closing rate of 4.0755/4.0800. Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, explained that the ringgit remained cautious due to market monitoring of geopolitical events, including the United Nations General Assembly and the forthcoming meeting between US President Donald Trump and Chinese President Xi Jinping.

He pointed out that subsequent interest rate hikes by the European Central Bank, the US Federal Reserve, and the Bank of Japan signaled that monetary policy would likely remain tight until inflation approached the two percent target. Additionally, the fact that Brent crude oil prices remained above US$100 per barrel highlighted the precariousness of the current geopolitical scenario.

Earlier, the resumption of oil flows from Saudi Arabia via the Strait of Hormuz had boosted market sentiment, but the situation still required significant improvement, according to Dr Afzanizam. At the close, the ringgit showed overall strength against a basket of major currencies, strengthening against the euro, the British pound, and the Japanese yen.

However, it weakened against the Singapore dollar and the Thai baht, while remaining stable against the Indonesian rupiah and unchanged against the Philippine peso.