THE ringgit opened firmer against the US dollar on Monday as improving global market sentiment and optimism surrounding possible progress in negotiations between Washington and Tehran lifted investor appetite for riskier assets.
The local currency strengthened to 3.9635/3.9705 against the greenback at the opening of trade, compared with Friday’s close of 3.9655/3.9700, supported by a weaker US dollar and easing concerns over global energy supply disruptions.
Market sentiment improved following reports that the United States and Iran were discussing a potential agreement that could pave the way for the reopening of the Strait of Hormuz, one of the world’s most strategically important oil shipping routes through which roughly 20 per cent of global crude supply passes.
The prospect of easing tensions in the Middle East triggered a broader risk-on rally across financial markets, with investors shifting towards equities and emerging market currencies.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) declined 0.25 per cent to 98.987 points, reflecting weaker demand for the safe-haven greenback.
At the same time, the S&P 500 futures index climbed 0.61 per cent to 7,536.50 points, indicating growing confidence among traders and investors.
Oil prices also retreated sharply amid expectations that any agreement involving the Strait of Hormuz could ease supply concerns and stabilise global energy flows.
West Texas Intermediate crude fell more than five per cent to US$91.75 per barrel, while Brent crude declined to US$98.33 per barrel.
“On that note, the ringgit could appreciate further amid improved market sentiment. The ringgit against the US dollar could move towards RM3.95.
“Relatively better macroeconomic indicators, such as an improving current account surplus and narrowing fiscal deficit in the first quarter of 2026, suggest the risk of Malaysia becoming a twin-deficit economy remains low,” Afzanizam said.
Despite the stronger performance against the US dollar, the ringgit traded weaker against several major global currencies at the opening.
The local note slipped against the Japanese yen to 2.4934/2.4980 from 2.4925/2.4954 at Friday’s close.
It also weakened against the British pound to 5.3432/5.3526 from 5.3245/5.3305 previously and declined versus the euro to 4.6143/4.6225 compared with 4.6012/4.6064 last week.
Analysts said investors are now closely watching developments in the US-Iran negotiations and global energy markets, which are expected to remain key drivers of currency movements and broader market sentiment in the coming days. - May 25, 2026
