On a Wednesday morning in Kuala Lumpur, the ringgit crept upward against the US dollar and its major peers, a small movement that carries the weight of larger forces. Oil prices had eased just beneath the hundred-dollar mark, and a tentative encounter between American and Iranian officials at the United Nations offered a faint hope that tensions might loosen. Yet the same currency that gained ground also carries the uncertainty of an American central bank that has not yet said which way it will turn, and markets are already betting on higher rates. The ringgit, in this moment, is less a verdic
Ringgit Opens Higher Against Dollar as Oil Prices Ease and US-Iran Talks Lift Sentiment
Easing oil and Iran hopes pull one way; an uncertain Fed pulls the other
Mark
The ringgit moved from 4.0730 to 4.0680. Is that really news?
Mimi
It's small, but the reasons behind it are the story. Oil sitting at US$99.25 and a US-Iran meeting at the UN both helped sentiment.
Luke
Worth noting the move is a few hundredths of a ringgit. The economist himself expects a narrow range today.
Mark
What's the Iran piece exactly?
Mimi
Trump called the meeting with Iranian officials very good. Mohd Afzanizam said that raised hope for a peace deal, but called it fluid.
Luke
And that's Trump's description, relayed through an economist. We don't have the substance of what was discussed or any agreement.
Mark
Then why does the Fed matter here?
Mimi
Futures put the odds of hikes in October and December above 50 per cent, which implies two more this year. A stronger dollar from hikes would weigh on the ringgit.
Luke
Careful, though. Over 50 per cent is a market-implied probability, not a decision, and the article says Fed officials gave no clear direction.
Mark
So what's the takeaway?
Mimi
Offsetting forces, and a currency that gained against most peers but slipped slightly against the Philippine peso.
Luke
Which is a reminder that this is an opening-hour snapshot at 8 am, not a trend.
Der Puls
- The ringgit opened firmer at 4.0680 against the US dollar, lifting from Tuesday's close of 4.0730 as traders reacted at the start of the session.
- Brent crude slid to US$99.25 a barrel, dipping under the psychologically important US$100 level and easing pressure on oil-linked markets.
- US and Iranian officials met on the sidelines of the UN General Assembly, and Washington called the talks very good, though analysts warn the situation remains fluid.
- Futures contracts put the odds of Federal Reserve rate hikes in October and December above 50 per cent each, a looming threat that tempers the currency's gains.
- Analysts expect the ringgit to hold within a narrow range, with traders watching Brent against US$100, any news from Iran talks, and Fed signals ahead of the autumn meetings.
On a Wednesday morning in Kuala Lumpur, the ringgit crept upward against the US dollar and its major peers, a small movement that carries the weight of larger forces. Oil prices had eased just beneath the hundred-dollar mark, and a tentative encounter between American and Iranian officials at the United Nations offered a faint hope that tensions might loosen. Yet the same currency that gained ground also carries the uncertainty of an American central bank that has not yet said which way it will turn, and markets are already betting on higher rates. The ringgit, in this moment, is less a verdict than a balance held between relief and caution.
At 8 am on Wednesday in Kuala Lumpur, the ringgit was quoted at 4.0680 against the US dollar, a modest step up from Tuesday's close of 4.0730. It was a small opening, but it arrived with a sense of relief in the air.
Chief economist Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia pointed first to oil. Brent crude hovered at US$99.25 a barrel, just under the hundred-dollar line, and he judged that level supportive for the currency.
Behind that calm lay a fragile hope from geopolitics. US and Iranian officials had met on the sidelines of the United Nations General Assembly, and President Donald Trump called the meeting very good. Mohd Afzanizam said it raised hopes of a peace deal, while stressing that nothing was settled.
The mood was tempered by the Federal Reserve. Officials had offered no clear direction, and futures contracts priced more than a 50 per cent chance of rate hikes in both October and December, suggesting markets expect two more increases this year.
The ringgit also firmed against the euro, the pound and the yen, and against most ASEAN neighbours, though it slipped slightly against the Philippine peso. Mohd Afzanizam expects a narrow trading range, with eyes on oil, Iran, and the Fed.
At 8 am on Wednesday in Kuala Lumpur, the ringgit was quoted at 4.0680/0765 against the US dollar. Tuesday's close had been 4.0730/0775, so the local currency opened the day modestly stronger.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that oil prices were helping. Brent crude was hovering just under US$100 a barrel, at US$99.25, and he described that level as supportive of the foreign exchange market.
The second factor was geopolitical. US and Iranian officials met on the sidelines of the United Nations General Assembly, and US President Donald Trump described the meeting as very good. Mohd Afzanizam said this raised hopes of progress toward a peace deal, though he stressed that the situation remains fluid.
The third factor was less encouraging. Mohd Afzanizam said US Federal Reserve officials had given no clear signal on the direction of monetary policy. He pointed to Federal Funds futures contracts, which put the odds of a rate hike in October and in December at more than 50 per cent each. In his reading, that suggests the market expects two more hikes this year.
The ringgit also opened higher against a basket of major currencies. It rose to 4.6566/6664 against the euro, from 4.6705/6757 at Tuesday's close. Against the British pound it moved to 5.4275/4389 from 5.4452/4512, and against the Japanese yen to 2.5830/5886 from 2.5958/5988.
Among its ASEAN neighbours, the picture was mostly positive. The ringgit firmed against the Singapore dollar at 3.1901/1970, from 3.1955/1993, and gained against the Thai baht at 12.2826/3142, from 12.2847/3035. It inched up against the Indonesian rupiah to 227.4/228.0 from 227.7/228.0. The one soft spot was the Philippine peso, where the ringgit slipped slightly to 6.48/6.50 from 6.49/6.50.
With easing oil and cautious optimism on Iran pulling one way and an uncertain Fed and possible rate hikes pulling the other, Mohd Afzanizam expects the ringgit to trade in a narrow range on Wednesday. The things to watch are the Brent price relative to the US$100 mark, any further word from US-Iran contacts, and signals from the Fed ahead of the October and December meetings.
Bemerkenswerte Zitate
Prevailing crude oil prices were supportive of the foreign exchange market, and the US-Iran meeting raised hope for progress toward a peace deal, although it remains fluid.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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