Ringgit Closes Higher As Tension In Strait Of Hormuz Eases

By Danni Haizal Danial Donald

KUALA LUMPUR, March 17 (Bernama) -- The ringgit continued its upward momentum on Tuesday, closing higher against the US dollar as news of some ships being allowed safe passage through the Strait of Hormuz eased demand for safe haven assets and lifted regional currencies.

At 6 pm, the local currency strengthened to 3.9155/9200 against the greenback from Monday’s close of 3.9260 /9310.

SPI Asset Management managing partner Stephen Innes said the vital shipping route was showing signs of recovery, with some major vessels passing through over the past 24 hours, despite reports suggesting it was on the verge of a complete shutdown.

“A Pakistan-flagged Aframax (ship) cleared the Strait of Hormuz, en route to Karachi, and Iran-linked traffic has picked up meaningfully, with a dozen vessels moving through in the past 24 hours, including a very large crude carrier (VLCC) heading to China. This shift takes the edge off the panic bid in the US dollar and offers some relief for regional currencies,” he told Bernama.

Innes said the easing of ship passage flow in the Strait of Hormuz was a constructive signal that lifted the ringgit, reflecting a market that is recalibrating risk rather than pricing full-scale disruption.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit has continued to remain resilient despite lingering concerns over oil and gas supplies amid the ongoing conflict in West Asia.

He noted that the market is also watching the US Federal Open Market Committee (FOMC) two-day meeting starting today, where most economists expect no change in the Fed funds rate (FFR) of 3.75 per cent.

“At the same time, weak sentiments among US businesses and households could also potentially undermine economic growth prospects.  Already, we saw that the US February nonfarm payroll (NFP) contracted by 92,000 jobs while the unemployment rate rose to 4.4 per cent from 4.3 per cent previously.

“This suggests there are signs of a softening trend in the labour market. Thus far, the US Dollar Index (DXY) has been gradually climbing, and presently, the index hovers around 100 points,” he added.

The local note was mostly lower against other major currencies.

It rose against the Japanese yen to 2.4603/4632 from 2.4639/4672 at  Monday’s close, but depreciated versus the British pound to 5.2205/2265 from 5.2008/2074, and eased vis-à-vis the euro to 4.5063/5115 from 4.4945/5002.

The local currency traded mostly higher against most ASEAN currencies.

It was slightly higher against the Singapore dollar at 3.0635/0673 from 3.0650/0692 at Monday’s close, inched up vis-à-vis the Indonesian rupiah to 230.3/230.7 from 230.9/231.3, and advanced versus the Philippine peso to 6.54/6.56 from 6.55/6.56 previously.

However, it edged down versus the Thai baht to 12.0957/1167 from 12.0644/0857 yesterday.

-- BERNAMA