The ringgit opened almost unchanged against the US dollar on Wednesday as global market sentiment remained cautious, influenced by the latest developments involving relations between the United States and Iran.
At 10:24am, the ringgit was at 3.9530 against the US dollar, down 0.13% since it opened early Wednesday in Asian trading.
The uncertainty was triggered when the ceasefire, which was expected to end today, was reportedly extended at the last minute to allow for negotiations to be concluded, although there has been no official confirmation from the Iranian side so far.
According to Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid, the last-minute decision by US President Donald Trump to extend the ceasefire shows an inconsistent policy message, thus forcing the market to adjust their expectations.
This situation not only increases the level of uncertainty, but also opens up the possibility of a compromise between the two parties in the near term.
Meanwhile, global energy markets continued to show upward pressure as West Texas Intermediate (WTI) and Brent crude oil prices rose by 2.57 percent and 3.74 percent, respectively, to US$89.67 per barrel and US$99.05 per barrel.
In the United States, the latest economic data also attracted attention as retail sales for March recorded a 0.7 percent increase month-on-month, beating consensus expectations of 0.2 percent.
However, when gas and automotive components are excluded, real growth was only 0.6 percent.
Meanwhile, developments in US monetary policy also stole the spotlight as Federal Reserve chairman nominee Kevin Warsh reaffirmed his commitment to central bank independence during a hearing before the Senate Banking Committee on Tuesday.
He also hinted at a new framework to address the rising cost of living, although he did not detail the steps that will be taken.
In this environment, the US Dollar Index (DXY) rose 0.32 percent to 98.414 points, reflecting the strengthening of the currency amid global uncertainty.
Accordingly, the ringgit is expected to remain in a narrow range of RM3.94 to RM3.96 throughout the day, with investors and traders continuing to monitor the latest developments in the conflict in Iran.
In the opening trading session, the ringgit's performance against major currencies showed mixed movements.
The local currency weakened slightly against the British pound to 5.3366/3467 from 5.3323/3377 at yesterday's close, but strengthened against the euro to 4.6391/6479 from 4.6436/6483 previously and rose against the Japanese yen to 2.4785/4834 from 2.4802/4829.
Among ASEAN currencies, the ringgit also showed mixed performance as it rose against the Singapore dollar to 3.1018/1079 from 3.1043/1077, and strengthened against the Thai baht to 12.2709/3022 from 12.2983/3162.
However, it remained unchanged against the Indonesian rupiah at 230.3/230.9 from 230.3/230.7 and was also unchanged against the Philippine peso at 6.59/6.60.
