KUALA LUMPUR: The ringgit opened slightly lower against the US dollar on Tuesday in line with regional markets as investors continued to reassess their risk parameters following the weekend’s events in Saudi Arabia and ahead of the US Federal Reserve decision on its interest rate tomorrow.
The tensions in the Middle East have escalated after drone attacks on two major oil facilities in Saudi Arabia.
Crude oil price declined by 1.49% to US$67.99 per barrel.
At 9am, the ringgit slipped to 4.1710/1750 versus the greenback from 4.1630/1660 on Friday.
The market was closed on Monday for Malaysia day.
OANDA senior market analyst, Asia Pacific Jeffrey Halley said the market would be focusing on the glut of oil headlines overnight coupled with the Federal Open Market Committee two-day meeting which begins today.
“As well as a slowing global economy made worse by the US-China trade war, the Fed rate-setting committee now has to contend with the possibility of sharply escalating tensions in the Middle East and the ramifications of possible shots being fired across the Straits of Hormuz,” he said.
On the local front, Bank Negara Malaysia maintained the Overnight Policy Rate (OPR) at 3% at its Monetary Policy Committee (MPC) last week, saying the global economy is expanding at a more modest pace amid slower growth in most major advanced and emerging economies.
The last MPC meeting for this year will be held on Nov 5 with many economists believing the central bank might keep the interest rate unchanged.
Meanwhile, the ringgit was mostly higher against a basket of other major currencies.
It rose versus the Japanese yen to 3.8549/8590 from 3.8550/8581 on Friday’s close and was marginally higher against the Singapore dollar at 3.0310/0350 from 3.0318/0345.
The local note appreciated against the British pound to 5.1800/1866 from 5.1829/1883 and strengthened to 4.5919/5967 from 4.6205/6255 vis-a-vis the euro.