The Malaysian ringgit opened nearly unchanged against the US dollar as mixed global sentiment and political developments influenced currency markets.
KUALA LUMPUR: The ringgit opened nearly unchanged against the US dollar on Monday. Mixed global sentiment capped gains as investors assessed political developments and major currency moves.
At 8 am, the local note traded almost flat at 3.9430/9560 against the greenback. This compared with last Friday’s close of 3.9440/9525.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said multiple global factors are shaping foreign exchange markets. He expects the US dollar-ringgit pair to trade between RM3.93 and RM3.95 today.
“We foresee emerging market currencies, including the ringgit, remaining on a positive note amid an improvement in market uncertainty,” he told Bernama.
On external developments, he said the landslide victory by Japan’s Liberal Democratic Party in Sunday’s election signalled that Prime Minister Sanae Takaichi is likely to proceed with further economic stimulus measures. This move could weigh on the Japanese yen.
At the same time, easing tensions between the United States and Iran over the nuclear programme following discussions on Friday has led to lower benchmark Brent crude prices. Political developments in the region were also supportive of market sentiment.
He highlighted Thailand’s general election, where the Bhumjaithai Party secured a comfortable margin. This points to continued political and economic stability in the country.
“In some sense, there is a bit of optimism in the market. However, the weaker yen has contributed to a firmer US Dollar Index,” he said.
At the opening, the ringgit traded mostly lower against a basket of major currencies. It strengthened against the Japanese yen to 2.5075/5161 from 2.5111/5167 at last Friday’s close.
Conversely, it weakened versus the British pound to 5.3664/3841 from 5.3548/3663. The local note also slipped against the euro to 4.6630/6784 from 4.6508/6608 previously.
The ringgit was also mostly lower against its ASEAN peers. It traded nearly flat against the Indonesian rupiah at 233.6/234.5 from 233.6/234.3 at last Friday’s close.
It eased vis-à-vis the Singapore dollar to 3.1020/1125 from 3.0965/1034. The local note fell against the Thai baht to 12.5386/5887 from 12.4609/4933 previously.
It was flat versus the Philippine peso at 6.73/6.75.
