Ringgit opens higher against US dollar as oil prices ease

The ringgit opened higher against the US dollar and a basket of major currencies on Friday, supported by improved market sentiment as easing West Asia crude oil supply concerns lifted risk appetite.

At 8am, the local note increased to 4.0955/4.1015 against the greenback from Thursday’s close of 4.0965/4.1010.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said market sentiment was lifted after Saudi Arabia reportedly began restoring its damaged East-West pipeline, while tanker movements through the Strait of Hormuz continued, easing immediate concerns over supply.

“As a result, Brent crude oil prices fell 0.95% to US$104.82 per barrel, while US Treasury yields declined, with the two- and 10-year notes falling seven basis points each to 4.67% and 4.94%, respectively.

“However, attention has now shifted to the Bank of Japan’s (BOJ) monetary policy decision later today, with consensus expecting a 25-basis-point increase in its policy rate to 1.25%,” he added.

He said the market would be closely watching the BOJ’s economic assessment and policy tone, as a more hawkish stance could trigger further unwinding of yen carry trades and heighten volatility in the foreign exchange market.

Hence, Afzanizam expects the ringgit to stay in a narrow range today as traders will be observing this critical event.

At the opening, the ringgit was higher against a basket of major currencies.

The local note gained against the euro to 4.7000/4.7069 from Thursday’s close of 4.7003/4.7055, rose against the yen to 2.6228/2.6268 from 2.6305/2.6336, and advanced vis-à-vis the British pound to 5.4704/5.4784 from 5.4877/5.4937 previously.

The ringgit traded mixed against its Asean peers.

The local currency appreciated against the Singapore dollar to 3.2096/3.2146 from 3.2099/3.2137, but dipped against the Thai baht to 12.3043/12.3279 from 12.2734/12.2917.

The ringgit remained unchanged vis-à-vis the Philippine peso at 6.53/6.54 and against the Indonesian rupiah at 230.7/231.1 yesterday.

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