Ringgit closes lower against US dollar amid Mideast uncertainty
KUALA LUMPUR: The ringgit closed lower against the greenback on Monday as US involvement in the war between Israel and Iran spurred demand for safe haven assets like the American dollar, an analyst said.
The United States bombed Iran's nuclear facilities on Sunday.
At 6pm, the local note slid to 4.2915/2980 versus the greenback from last Friday's close of 4.2505/2565.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US Dollar Index (DXY) was 0.25 per cent higher at 98.958 points as heightened geopolitical risks in the Middle East have led to cautious sentiments among traders. He said Brent crude prices stayed elevated as the Iranian parliament approved a measure to close the Strait of Hormuz, which will disrupt oil supplies from the Middle East if the closure actually happens, but ultimately, the decision will come down to Iran's top leaders.
At the time of writing, the Brent crude oil price rose 0.77 per cent to US$77.48 per barrel.
"Immediately, traders and investors are observing the dynamics of the Israel-Iran standoff and whether it would escalate into a new trajectory," he told Bernama.
At the close, the ringgit traded mostly lower against a basket of major currencies.
It appreciated against the Japanese yen to 2.9028/9074 from 2.9245/9289 at last Friday's close, but slipped versus the British pound to 5.7437/7524 from 5.7356/7437 and declined vis-à-vis the euro to 4.9236/9311 from 4.9000/9069 previously.
The ringgit also performed mostly lower against its Asean peers.
The local note was marginally lower versus the Philippine peso at 7.44/7.46 from 7.43/7.45 last Friday, and inched down versus the Indonesian rupiah to 260.2/260.7 from 259.2/259.7 previously.
It also weakened vis-à-vis the Thai baht to 12.9998/13.0250 from 12.9727/9969 last Friday and depreciated against the Singapore dollar to 3.3188/3243 from 3.3088/3140 at the previous close.
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