The ringgit opened higher against the US dollar on Tuesday, even as uncertainties in the Strait of Hormuz continued to be a concern and pushed up global crude oil prices.
At 10am, the ringgit was at RM4.0780, down 0.25% since it opened early Tuesday in the Asian session.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the situation in the Strait of Hormuz was now the main focus of the market after WTI and Brent crude oil prices jumped 9.42% to $78.14 per barrel and 9.35% to $83.12 per barrel, respectively.
At the same time, US Treasury bond yields for two-year and 10-year terms rose by eight basis points to 4.28% and six basis points to 4.62%, respectively.
This reflects expectations that inflation will continue to rise, thus reinforcing the view that the US Federal Reserve (Fed) may raise policy interest rates this year.
According to him, these expectations have strengthened the US Dollar Index (DXY) to 101.276 points.
In this situation, emerging market currencies including the ringgit are expected to remain volatile in the near term.
He expects the ringgit exchange rate against the US dollar to move in the range of 4.07 to 4.10 today.
In early trade, the ringgit also strengthened against several major world currencies.
The ringgit rose against the Japanese yen to 2.5040/5075 from 2.5110/5142 at the close on Monday.
It also strengthened against the British pound to 5.4297/4370 from 5.4475/4542, and rose against the euro to 4.6296/6359 from 4.6501/6558 previously.
Against ASEAN currencies, the ringgit was mixed.
The ringgit strengthened against the Singapore dollar to 3.1417/1464 from 3.1489/1530, and also rose against the Thai baht to 12.1396/1618 from 12.1953/2151.
However, the ringgit was unchanged against the Indonesian rupiah at 224.6/225.0, and remained flat against the Philippine peso at 6.60/6.62 compared to yesterday's close.
