The ringgit opened higher against the US dollar and other major currencies on Tuesday, as talks between the United States (US) and Iran were underway that could potentially end the conflict and reopen the Strait of Hormuz.
At 10.05am, the ringgit was trading at 3.9610, down 0.25% since it opened early Tuesday in Asian trading.
US President Donald Trump reported that the talks were ‘going well’ while Pakistan’s Army Chief informed China that a deal was ‘close’.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said that while there was optimism that the two countries had a chance of reaching an agreement, no concrete developments had occurred so far.
He explained that the impact on the cost of living and the need for global central banks to maintain tight monetary policy had put pressure on the bond market through rising yields.
He also stated that in short, the outlook remains unclear and traders are expected to remain cautious in assessing the impact of these negotiations on the real economy.
Dr Mohd Afzanizam predicted the ringgit to trade flat in the range of RM3.94 to RM3.95 today as market participants await further information on the ongoing US-Iran negotiations.
In the opening session, the ringgit was traded higher against a basket of major currencies.
The ringgit strengthened against the Japanese yen to 2.4847/4887 from 2.4860/4887 at Monday's close, rose against the euro to 4.5958/6028 from 4.5998/6044 yesterday, and rose against the pound to 5.3301/3382 from 5.3311/3365 previously.
The local currency showed improvement against regional currencies, although it traded flat against the Indonesian rupiah at 222.6/223.0.
The ringgit also rose against the Singapore dollar to 3.0917/0967 from 3.0932/0966 at yesterday's close, higher against the Philippine peso at 6.42/6.44 from 6.43/6.44, and rose against the Thai baht to 12.1445/1704 from 12.1640/1816 previously.
