Ringgit opens higher against US dollar as oil prices ease

KUALA LUMPUR: On Wednesday, the Malaysian ringgit opened higher against the US dollar, buoyed by a decline in Brent crude oil prices and reduced geopolitical tensions. At 8 am, the ringgit traded at 4.0680/4.0765 against the US dollar, up from Tuesday’s close of 4.0730/4.0775. Afzanizam Rashid, chief economist at Bank Muamalat Malaysia, stated that the current crude oil prices were beneficial for the foreign exchange market.

Brent crude prices were noted to be below the US$100 per barrel mark at US$99.25. The recent US-Iran talks, which US President Donald Trump described as "very good," brought hope for progress in a potential peace deal, although the situation remains uncertain. Regarding the US Federal Reserve, Afzanizam pointed out that there was no clear indication of their stance on monetary policy.

Based on Federal Funds futures contracts, there was more than a 50% chance of a rate hike in October and December, indicating the market's expectation of further rate hikes this year. Consequently, the ringgit was expected to remain within a narrow trading range. The ringgit also showed strength against other major currencies, including the euro, British pound, Japanese yen, Singapore dollar, Thai baht, Indonesian rupiah, and Philippine peso.