KUALA LUMPUR, April 22 — The ringgit opened almost flat against the United States (US) dollar on Wednesday as market sentiment remained cautious following news that the US-Iran ceasefire, originally expected to expire today, has been extended to allow negotiations with Iran to conclude.
At 8am, the local currency was nearly unchanged at 3.9495/9570 versus the greenback compared with 3.9490/9530 at yesterday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that, in a last-minute bid, US President Donald Trump announced that the ceasefire would continue until both sides reach an agreement, although Iranian officials have not confirmed this.
“It appears the market would need to familiarise itself with the inconsistent messaging. While it does create a high degree of uncertainty, it also suggests some indecisiveness, leading to hopes that a compromise could be achieved at some point,” he told Bernama.
Afzanizam added that West Texas Intermediate (WTI) and Brent crude prices continued to climb by 2.57 per cent and 3.74 per cent to US$89.67 per barrel and US$99.05 per barrel as the prospects for a truce between the US and Iran looked dim.
“Meanwhile, retail sales in the US grew more than expected in March, rising 0.7 per cent month-on-month against the consensus estimate of 0.2 per cent.
“However, excluding gas and autos, retail sales sustained at 0.6 per cent, suggesting that higher gasoline prices in March were the main reason for higher retail sales. This could mean Americans’ purchasing power is reducing as they need to allocate more budget for fuel at the expense of other products,” he said.
In another development, the US Federal Reserve's chairman nominee Kevin Warsh remained consistent in his stance on central bank independence during the Senate Banking Committee hearing on Tuesday, promising a new framework in dealing with higher cost-of-living issues, although no details were spelt out.
Afzanizam said the US Dollar Index rose 0.32 per cent to 98.414 points.
“On that note, the ringgit will remain in a narrow range of between RM3.94 to RM3.96 today as traders and investors will be observing the eventual outcome in the war in Iran,” he said.
At the opening, the ringgit traded mostly higher against a basket of major currencies.
It weakened versus the British pound to 5.3366/3467 from 5.3323/3377 at yesterday’s close, but edged up against the euro to 4.6391/6479 from 4.6436/6483 previously and gained vis-à-vis the Japanese yen to 2.4785/4834 from 2.4802/4829.
The local currency traded mixed against its ASEAN peers.
It rose versus the Singapore dollar to 3.1018/1079 from yesterday’s close of 3.1043/1077, appreciated against the Thai baht to 12.2709/3022 from 12.2983/3162 on Tuesday, but it was flat vis-à-vis the Indonesian rupiah at 230.3/230.9 versus 230.3/230.7 yesterday and stood firm at 6.59/6.60 against the Philippine peso.
