Ringgit rises against US dollar, major currencies on improved sentiment

KUALA LUMPUR: The Malaysian ringgit started off marginally stronger against the US dollar and a group of major currencies on Tuesday. This positive movement was fueled by a more favorable market sentiment due to easing global oil prices and recent geopolitical developments. By 8am, the ringgit had risen to 4.0750/4.0805 against the US dollar, up from Monday’s closing rate of 4.0755/4.0800.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid explained that the drop in Brent crude oil prices played a role in this improvement. Brent crude prices fell 3.4% to US$100.34 per barrel after Saudi Arabia increased its oil exports through the Strait of Hormuz following a shutdown of the East-West pipeline. Saudi Arabia's oil exports via the Strait of Hormuz jumped to approximately 2.9 million barrels per day, up from around 700,000 barrels per day in August.

Moreover, Afzanizam noted that US President Donald Trump's willingness to meet with Iranian President during the United Nations General Assembly this week might signal some positive developments concerning the conflict in West Asia. As a result, the ringgit could progressively appreciate throughout the day.

By the market opening, the ringgit was trading higher against a basket of major currencies. It gained against the euro, reaching 4.6716/4.6779 from 4.6783/4.6834 at Monday's close. The local currency also strengthened against the British pound, moving to 5.4475/5.4548 from 5.4542/5.4603, and rose versus the Japanese yen, trading at 2.5893/2.5931 from 2.5916/2.5946.

However, the ringgit showed mixed performance against its Asean peers. It slightly increased against the Singapore dollar, going from 3.1950/3.1987 to 3.1931/3.1976. Conversely, it depreciated against the Thai baht, moving from 12.2450/12.2637 to 12.2593/12.2822. The local note remained unchanged against the Indonesian rupiah, at 228.3/228.7, and did not change against the Philippine peso, which stayed at 6.49/6.50 at Monday's close.