On a Friday morning in Kuala Lumpur, the ringgit found itself pulled in two directions at once: firmer against most of the world's major currencies, yet slightly weaker against the US dollar. The cause lies in a fresh flare-up in the West Asia conflict, which has dimmed the hope that the United States and Iran might reach a peace settlement. Investors, like travellers pausing at a crossroads, chose caution, waiting for the next clear sign from American jobs figures and from the distant negotiating tables. Behind the small numbers stands a steady central bank, which has kept its policy rate unc
Ringgit Opens Mixed: Firmer Against Majors, Softer Against Dollar Amid West Asia Tensions
The ringgit slipped against the dollar but gained almost everywhere else.
Mark
The ringgit was up against the euro, pound and yen but down against the dollar. How does that happen?
Mimi
The dollar is the benchmark here. It slipped from 3.9070/9115 at Thursday's close to 3.9100/9200 at 8 am, while the other currencies were quoted lower in ringgit terms than the day before, so the ringgit bought more of them.
Mark
And the cause is the West Asia conflict?
Mimi
The report ties the cautious mood to renewed escalation that dimmed hopes of a US-Iran peace deal. It also cites Bank Negara holding the OPR at 2.75 per cent as a support for the ringgit.
Luke
I'd be careful with the cause. The article says investors were cautious, but it offers no data linking the dollar move to the conflict. The move itself is tiny.
Mark
How tiny?
Luke
The opening quote was 3.9100/9200 against a prior close of 3.9070/9115. That is a few hundredths of a sen in either direction, well within ordinary morning noise.
Mimi
The Thursday gain was larger at 0.42 per cent, to RM3.9093.
Luke
Right, and the explanation for that gain, that the steady OPR is ringgit-positive, is one economist's view. Dr Mohd Afzanizam is credible, but it's an opinion, not a measured cause.
Mark
What about his forecast of RM3.90?
Luke
It's a forecast, nothing more. The real unknown is the US jobs data, which the dollar index at around 98 is waiting on.
Mimi
So the story is that the currency is steady while the market waits.
Der Puls
- The ringgit opened mixed, climbing against the euro, pound, yen and regional peers while slipping to about 3.91 against the US dollar.
- Renewed escalation in the West Asia conflict has shattered hopes of a US-Iran peace deal, leaving investors wary and holding back.
- Bank Negara's decision to hold the overnight policy rate at 2.75 percent is seen as a steadying hand, after the ringgit closed 0.42 percent stronger on Thursday.
- Traders are fixed on the forthcoming US jobs data, and analysts expect the ringgit to hover near RM3.90 per dollar while Middle East tensions persist.
On a Friday morning in Kuala Lumpur, the ringgit found itself pulled in two directions at once: firmer against most of the world's major currencies, yet slightly weaker against the US dollar. The cause lies in a fresh flare-up in the West Asia conflict, which has dimmed the hope that the United States and Iran might reach a peace settlement. Investors, like travellers pausing at a crossroads, chose caution, waiting for the next clear sign from American jobs figures and from the distant negotiating tables. Behind the small numbers stands a steady central bank, which has kept its policy rate unchanged and so lent the currency a quiet measure of confidence.
At 8 am on Friday in Kuala Lumpur, the ringgit was trading at about 3.91 to the US dollar, a touch weaker than Thursday's close as the day began. The greenback was the exception, though. Against nearly everything else, the ringgit opened firmer, gaining on the euro, the British pound, the Japanese yen, and most of its regional neighbours, including the Singapore dollar and the Thai baht.
The mood behind these movements was one of caution. A renewed escalation in the West Asia conflict has dimmed hopes of a peace deal between the United States and Iran, and investors have chosen to wait rather than commit. The market's attention is fixed on the latest US jobs data, which many believe will shape the next move.
Steadiness came from Bank Negara Malaysia, which kept the overnight policy rate at 2.75 percent. Analysts read this as a sign of confidence in the economy's strong fundamentals. The ringgit had closed 0.42 percent higher on Thursday, and analysts expect it to hold near RM3.90 per dollar as the Middle East tensions continue.
At 8 am on Friday in Kuala Lumpur, the ringgit was changing hands at 3.9100/9200 to the US dollar. Thursday's close had been 3.9070/9115, so the local currency had slipped slightly against the greenback as the trading day began.
Against almost everything else, though, it opened firmer. Investors were cautious after a renewed escalation in the West Asia conflict, which dimmed hopes of a peace deal between the United States and Iran. That caution did not stop the ringgit from gaining on most major currencies and regional peers.
Among the majors, the ringgit strengthened against the euro to 4.5872/5989 from 4.5978/6031 at Thursday's close. It rose against the British pound to 5.3004/3140 from 5.3202/3263, and against the Japanese yen to 2.4925/4990 from 2.4982/5013.
Regionally, the picture was similar. The ringgit appreciated against the Singapore dollar to 3.0807/0890 from 3.0861/0901, and against the Thai baht to 12.1098/1479 from 12.1486/1687. Against the Indonesian rupiah it was almost flat at 225.5/226.2, compared with 225.4/225 before. Versus the Philippine peso there was little change, with the quote at 6.47/4/6.49 against 6.46/6.48 previously.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that the US Dollar Index was fairly flat at around 98 points, as market participants waited for the latest US jobs data. He pointed to the day before, when the ringgit closed 0.42 per cent higher against the greenback at RM3.9093. That came after Bank Negara Malaysia held the overnight policy rate unchanged at 2.75 per cent.
In his reading, the central bank remains confident that strong economic fundamentals and sound policies will help the economy keep its growth momentum. A steady OPR, he said, should therefore be positive for the ringgit. His expectation for Friday was that the currency would stay around RM3.90 to the dollar.
So the morning's moves were small, and the next signal is likely to come from the US jobs data and from whether the West Asia conflict moves further from or closer to a negotiated settlement.
Bemerkenswerte Zitate
A steady OPR should be ringgit-positive, and the local currency is expected to remain around RM3.90 against the greenback today.— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd, to Bernama
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