Geopolitical jitters in West Asia push ringgit lower against US dollar at close

KUALA LUMPUR, May 28 — The ringgit closed lower against the US dollar on Thursday as escalating geopolitical tensions in West Asia increased demand for the greenback amid heightened risk aversion.

At 6pm, the local currency eased to 3.9670/9770 versus the greenback from Tuesday’s close of 3.9660/9705.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing conflict involving Iran continued to dominate market sentiment after the United States (US) reportedly launched another attack on the country while Kuwait responded to missile and drone threats, signalling slimmer prospects for peace in the Gulf region.

He also noted that the heightened tensions pushed oil prices higher, with West Texas Intermediate (WTI) rising 2.21 per cent to US$90.64 (RM360.58) per barrel and Brent crude increasing 2.26 per cent to US$96.42 (RM383.58) per barrel.

“The US Dollar Index (DXY) rose 0.12 per cent to 99.329 points as risk-off sentiment became increasingly prevalent.

“As such, the ringgit remained on a weaker trajectory, ranging between RM3.9693 and RM3.9818 against the US dollar,” Mohd Afzanizam told Bernama.

Meanwhile, he said risks of higher global inflation could lead markets to price in tighter monetary conditions, which are now reflected in higher bond yields.

“Therefore, market sentiment is expected to remain cautious in the near term,” he added.

At the close, the ringgit traded higher against the British pound but eased versus the Japanese yen and the euro.

It appreciated vis-a-vis the British pound to 5.3272/3319 from 5.3470/3530 at Tuesday’s close.

The local currency, however, slipped versus the Japanese yen to 2.4947/4970 from 2.4917/4947 on Tuesday and fell against the euro to 4.6181/6222 from 4.6172/6225 previously.

The ringgit traded mostly lower against regional peers.

It slid versus the Singapore dollar to 3.1085/1115 from 3.1038/1075 at Tuesday’s close, declined against the Thai baht to 12.1613/1773 from 12.1485/1675 previously, and eased vis-a-vis the Philippine peso to 6.45/6.46 from 6.44/6.46.

The ringgit was almost unchanged against the Indonesian rupiah at 222.8/223.1 versus 222.8/223.2 previously.

The market was closed on Wednesday, May 27, in conjunction with the Hari Raya Aidiladha public holiday. — Bernama

المصدر: Malay Mail