THE ringgit opened firmer against the US dollar and a basket of major currencies on Wednesday, buoyed by improving market sentiment linked to potential ceasefire talks between the United States and Iran.
At the opening, the local currency strengthened to 3.9400/9500 against the greenback, compared with Tuesday’s close of 3.9530/9585, reflecting cautious optimism among investors.
Market participants said sentiment was driven largely by expectations that geopolitical tensions in West Asia could ease, although uncertainty remains high.
Stephen Innes of SPI Asset Management said the ringgit could trend more positively if ceasefire efforts gain traction, signalling a shift from short-term de-escalation to more substantive negotiations.
“For now, this remains a headline-driven market where positioning shifts are reactive rather than conviction-led, but it is unlikely to see a sustained or explosive rally until there is something more tangible than rhetoric.
“In other words, the market may price the promise of peace, but it will not fully commit until ink meets paper and the ceasefire evolves into something durable,” he said.
However, he noted that uncertainty persists over whether Tehran will fully engage, particularly as US President Donald Trump continues to reinforce military presence in the region.
Economists also cautioned that the broader economic outlook remains clouded by the ongoing conflict, now entering its fourth week.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said mixed signals from Washington on ending the war, coupled with continued troop deployments, have added to market unease.
“The ongoing war in Iran has also led to fuel prices skyrocketing, which can fan inflationary pressures. This has compromised purchasing power among consumers, leading them to review their personal budget,” he said.
He added that recent economic indicators point to weakening global activity, particularly in services sectors across major economies.
“In addition, the US Dollar Index (DXY) remained below 100 points at 99.43 points as traders and investors were anxious about the duration of the war and the severe impact it may have on global growth and inflation,” he added.
Despite these concerns, the ringgit advanced broadly, rising against the Japanese yen, British pound and euro.
It also posted gains against regional currencies, strengthening versus the Singapore dollar, Thai baht and Philippine peso, while remaining broadly stable against the Indonesian rupiah.
Analysts said the currency’s near-term direction will remain closely tied to geopolitical developments, with markets continuing to react swiftly to headlines surrounding the West Asia conflict. - March 25, 2026
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