The ringgit started Friday morning on a positive note as it strengthened against the United States (US) dollar, driven by cautious investor sentiment following ongoing tensions in the Middle East.
At 10am, the ringgit was trading at 4.2480 against the US dollar, strengthening from yesterday's closing level of 4.2590.
Bank Muamalat Malaysia Bhd Chief Economist, Dr Mohd Afzanizam Abdul Rashid, explained that the decline in the US Dollar Index (DXY) below the 100-point level indicated investors' tendency to shift to other major currencies or safer asset classes.
Thus, the ringgit also benefited somewhat from the trend.
However, he stressed that this positive performance was likely to be temporary as global uncertainties continued to affect the market, including geopolitical factors and monetary policies of major countries.
Despite the strengthening against the US dollar, the ringgit recorded a depreciation against most other major currencies in early trade today.
The ringgit weakened against the British pound to 5.7264/7547 from 5.7164/7211 and fell against the euro to 4.8910/9152 from 4.8868/8908 previously. However, the local currency strengthened slightly against the Japanese yen to 2.9257/9404 from 2.9286/9312.
The ringgit's performance was more encouraging when compared to its ASEAN regional currencies.
The ringgit strengthened against the Singapore dollar to 3.3051/3219 from 3.3072/3102 yesterday, and also rose against the Thai baht to 12.9883/13.0593 from 12.9966/13.0513. The ringgit also strengthened against the Indonesian rupiah to 258.9/260.3 from 259.5/259.9, and rose against the Philippine peso to 7.39/7.44 from 7.41/7.42.
This situation shows that although the ringgit has strengthened slightly against the US dollar and regional currencies, complex external challenges continue to demand vigilance from investors and traders.
