Ringgit Extends Gains Against US Dollar On Stellar Trade Data Amid West Asia Tensions
By Durratul Ain Ahmad Fuad
KUALA LUMPUR, July 21 (Bernama) -- The ringgit extended its gains to close higher for a second consecutive day against the US dollar and other major currencies on Tuesday, supported by Malaysia’s stronger-than-expected trade performance, despite persistent geopolitical uncertainties.
At 6 pm, the local currency rose to 4.0870/0910 against the greenback from yesterday’s close of 4.0895/0950.
SPI Asset Management managing partner Stephen Innes said a rebound in semiconductor stocks across Asia also added another supportive layer, creating a friendlier regional backdrop for the local currency.
“That resilience is more notable given that the US dollar is currently trading stronger across the G10 board, while geopolitical uncertainty remains elevated,” he told Bernama.
Innes expects the ringgit to trade steadily with a slightly positive bias for the rest of the week barring any significant escalation in geopolitical risks.
“It is a slow US macroeconomic week and foreign exchange volatility is extremely low. The only issue could be a more meaningful escalation in West Asia and another surge in oil prices, but not the market’s base case at this time.
“In that scenario, the US dollar would likely pick up a meaningful geopolitical safe-haven bounce,” he said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that despite the ringgit’s positive performance today, market participants remained cautious over the ongoing hostilities between the US and Iran, which could compromise the flow of vessel traffic in the Strait of Hormuz.
“In the absence of critical data points, market participants will observe the event risk surrounding the US-Iran war as it has direct implications for crude oil prices,” he said.
Meanwhile, the ringgit traded higher against a basket of major currencies at the close today.
It appreciated vis-a-vis the euro to 4.6682/6727 from 4.6743/6806 at Monday’s close, strengthened against the Japanese yen to 2.5123/5148 from 2.5177/5212 and went up versus the British pound to 5.4868/4922 from 5.5049/5123 previously.
The local note traded mixed against regional currencies.
It depreciated versus the Singapore dollar to 3.1682/1716 from 3.1677/1722, and went down against the Indonesian rupiah to 228.4/228.8 from 227.8/228.2, at yesterday’s close.
However, it advanced vis-a-vis the Thai baht to 12.1420/1579 from 12.1556/1759, and climbed against the Philippine peso to 6.62/6.63 from 6.63/6.64 on Monday.
-- BERNAMA