The ringgit opened higher against the US dollar on Friday as easing concerns over crude oil supplies from West Asia improved risk appetite.
At 8am, the local currency strengthened to 4.0955/1015 against the greenback from Thursday’s close of 4.0965/1010.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said sentiment improved after Saudi Arabia reportedly began restoring its damaged East-West oil pipeline, while tanker movements through the Strait of Hormuz continued.
“As a result, Brent crude oil prices fell 0.95 per cent 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 per cent and 4.94 per cent, 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 per cent,” he told Bernama.
Mohd Afzanizam said the market would be watching the BOJ’s economic assessment and policy tone closely, as a more hawkish stance could trigger further unwinding of yen carry trades and increase volatility in the foreign exchange market.
He expects the ringgit to remain in a narrow range today as traders assess the BOJ decision.
Against major currencies, the ringgit strengthened against the euro to 4.7000/7069 from 4.7003/7055 previously. It also gained against the yen to 2.6228/6268 from 2.6305/6336 and rose against the British pound to 5.4704/4784 from 5.4877/4937.
The local currency was mixed against its ASEAN peers.
It strengthened against the Singapore dollar to 3.2096/2146 from 3.2099/2137 but weakened against the Thai baht to 12.3043/3279 from 12.2734/2917.
The ringgit was unchanged against the Philippine peso at 6.53/6.54 and the Indonesian rupiah at 230.7/231.1.
