Ringgit opens slightly higher amid hopes of US-Iran talks progress

KUALA LUMPUR: The ringgit opened marginally higher against the US dollar on Tuesday, as hopes grew for progress in the US-Iran diplomatic talks. At 8am, the local currency was trading at 4.0690/0750, a slight improvement from Monday's close of 4.0695/0735. Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, suggested that successful negotiations between the US and Iran could result in the reopening of the critically important Straits of Hormuz.

Meanwhile, the price of Brent crude oil dropped by 8.12 per cent, falling to US$104.21 per barrel. Yields on US Treasury bills for three- and six-month maturities also decreased, signaling that the chances of a rate hike have been reduced. Despite the positive developments, the Middle East situation remains volatile, and market participants will be closely watching the outcome of the upcoming US mid-term elections, according to Dr Rashid.

However, he anticipates that the ringgit will fluctuate within a narrow range throughout the day due to cautious market sentiment. Across major currencies, the ringgit experienced a generally positive performance. It strengthened against the euro, moving from 4.5652/5697 to 4.5540/5607, and against the British pound, rising from 5.4621/4675 to 5.4561/4642.

However, it saw a slight decline against the Japanese yen, falling from 2.5766/5793 to 2.5769/5809. The ringgit had a mixed performance against its ASEAN counterparts, strengthening against the Singapore dollar, but remaining flat against the Indonesian rupiah and the Philippine peso. It also dropped against the Thai baht, falling from 12.0496/0661 to 12.0634/0920.