The ringgit opened slightly stronger against the US dollar in early trade on Monday, but mostly weaker against other major currencies, as market sentiment was seen as cautious ahead of the US Federal Reserve (Fed) meeting this week.
At 10:10am, the ringgit was at 3.9510 against the US dollar, up 0.28% since it opened early Monday in the Asian session.
According to SPI Asset Management managing partner Stephen Innes, the forex market is currently moving slowly, something that usually happens before the Fed meeting as traders are assessing whether the direction of monetary policy will be hawkish (tends to raise interest rates) or dovish (more market-friendly).
The Federal Open Market Committee (FOMC) meeting is scheduled to be held on April 28 and 29.
He said investor trading positions are now getting smaller and market confidence is also waning as many choose to wait until there is a clearer indication from the Fed.
From a geopolitical perspective, he explained that the failure of the Iran peace talks put some pressure on global risk sentiment and limited the US dollar's fall, which could have been greater earlier in the week.
However, he said, as long as there was no major military escalation that caused oil prices to rise sharply, the impact was expected to be contained.
For now, the ringgit still has the potential to strengthen moderately, but not aggressively.
At the opening of trading, the ringgit fell against several other major currencies.
It weakened against the British pound to 5.3529/3624 from 5.3429/3483, fell against the Japanese yen to 2.4831/4876 from 2.4808/4834, and fell against the euro to 4.6379/6461 from 4.6312/6358.
Against ASEAN currencies, the ringgit was traded mixed.
It was lower against the Singapore dollar to 3.1020/1078 from 3.1009/1043, but slightly higher against the Thai baht to 12.2181/2465 from 12.2183/2363.
The ringgit also rose against the Indonesian rupiah to 229.9/230.4 from 230.0/230.3, while it was little changed against the Philippine peso at 6.52/6.54 from 6.52/6.53 previously.
