The Malaysian ringgit eased against the US dollar as geopolitical tensions in West Asia spurred a shift towards safe-haven assets like the greenback.
KUALA LUMPUR: The ringgit opened lower against the US dollar on Monday. Market players continued to shift towards safe-haven assets amid prolonged geopolitical uncertainty.
At 8 am, the local currency slipped to 4.0125/4.0305 against the greenback from last Friday’s close of 4.0105/0140. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the foreign exchange market is likely to be in risk-off mode.
He said uncertainties from the impact of the US-Iran war continue to plague market sentiment. The US Dollar Index climbed toward 100.328 points, suggesting traders are seeking refuge in the US dollar.
Global bond fund managers have also sounded the alarm that bond prices would rally as the conflict could lead to slower growth. “The central bank could be forced to cut the interest rates based on their thesis,” Mohd Afzanizam told Bernama.
He added that the ringgit is likely to remain above the RM4.00 level in light of the risk aversion. This week the market will be observing the United States labour market data on Nonfarm Payrolls on Friday.
Signs of softening US labour market data have become more visible. February NFPs contracted 92,000, with consensus pencilling in 56,000 jobs to be created in the upcoming data.
“This is especially true when gasoline prices have gone up significantly following the war in Iran, leading to weak business and consumer sentiment,” he said. Traders are looking for signs of the war’s impact on Federal Open Market Committee decisions.
Meanwhile, the ringgit rose against the British pound to 5.3101/3340 from 5.3368/3414. It climbed vis-à-vis the euro to 4.6108/6314 from 4.6197/6237 previously.
The local unit also rose versus the Japanese yen to 2.5044/5158 from 2.5084/5109. Against Asean currencies, it appreciated versus the Singapore dollar to 3.1100/1244 from 3.1164/1194.
It gained versus the Thai baht to 12.1624/2255 from 12.1903/2077 previously. The ringgit edged down vis-a-vis the Indonesian rupiah to 236.3/237.4 from 236.1/236.5.
It was flat against the Philippine peso at 6.62/6.66 from 6.62/6.63 previously.