Ringgit Opens Easier Vs Dollar Amid Middle East Conflict

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KUALA LUMPUR: The ringgit opened slightly lower against the US dollar on Monday as the greenback’s appeal as a safe haven currency had strengthened amidst the current development in the Middle East conflict, said an analyst.
At 9 am, the local currency eased to 4.7715/4.7780 versus the US dollar from Friday’s closing of 4.7680/7730.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the foreign exchange markets are likely to remain anxious about Iran’s attack on Israel.
“The main question is whether there’s going to be a retaliation by the Israeli government and its allies.
“Given the elevated level of uncertainties, markets are expected to remain defensive by positioning themselves in safe haven currencies such as the US dollar,” he told Bernama.
Additionally, he said demand for fixed income is also expected to go higher as investors would prefer to hold more risk-free assets in light of the possible volatility in the markets.
Meanwhile, Afzanizam said the higher-than-expected US inflation data last week along with hawkish commentaries by the US Federal Reserve officials would also keep the US dollar well supported.
“As such, the MYR/USD is expected to remain weak at around RM4.76-RM4.77 today,” he added.
On Sunday, Prime Minister Anwar Ibrahim said the government is closely monitoring developments in the Middle East conflict and the financial market situation, including the potential impact on Malaysia.
Anwar, who is also the finance minister, said the government will act wisely to strengthen the country’s economic and financial stability.
Meanwhile, the ringgit was traded higher against a basket of major currencies.
It rose against the euro to 5.0797/5.0867 from 5.0808/5.0861 at Friday’s close, increased marginally vis-a-vis the Japanese yen to 3.1089/1133 from Friday’s 3.1098/1133, and strengthened versus the British pound to 5.9410/9491 from 5.9562/9624 previously.
At the same time, the ringgit was traded mixed against Asean currencies.
It was higher versus the Thai baht at 12.9907/13.0127 from 13.0831/13.1036 at Friday’s close and appreciated against the Singapore dollar to 3.5046/5096 from 3.5090/5129 preciously.
However, the local note depreciated vis-a-vis the Indonesian rupiah to 301.0/301.6 from 300.8/301.3 last week and was flat versus the Philippines’ peso at 8.43/8.45 from 8.43/8.44 previously. - FMT

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