Ringgit Opens Almost Flat Against Greenback as US Extends Ceasefire with Iran

Why It Matters

The extended US‑Iran cease‑fire keeps oil markets volatile, influencing the ringgit’s narrow trading range and highlighting how US consumer data and dollar strength affect emerging market currencies.

Key Takeaways

• Ringgit steadied near RM3.95 per USD amid US‑Iran ceasefire extension
• US retail sales rose 0.7% month‑on‑month, driven by higher gasoline prices
• WTI and Brent crude jumped over 2.5% and 3.7% respectively
• Dollar index climbed 0.32% to 98.41, pressuring regional currencies
• Analysts expect ringgit to trade between RM3.94‑RM3.96 amid geopolitical uncertainty

Pulse Analysis

The United States’ last‑minute decision to prolong its cease‑fire with Iran has injected a fresh dose of caution into Asian currency markets. While the truce postpones immediate conflict, the lack of clear communication from Tehran leaves investors wary, especially as oil prices rally sharply. Higher WTI and Brent benchmarks not only signal tighter supply expectations but also reinforce the dollar’s appeal as a safe‑haven asset, keeping the ringgit tethered to a narrow band around RM3.95.

At the same time, US retail sales data for March surprised on the upside, expanding 0.7% month‑on‑month, largely due to a spike in gasoline purchases. The underlying core sales figure, which strips out volatile fuel and auto categories, rose a modest 0.6%, suggesting that the headline growth is fuel‑driven. This dynamic erodes real consumer purchasing power and fuels expectations of a stronger dollar, as higher energy costs bolster the US inflation narrative. Consequently, the Dollar Index edged higher, adding pressure on emerging market currencies that are already sensitive to oil price swings.

Looking ahead, market participants expect the ringgit to remain confined between RM3.94 and RM3.96 as they monitor both geopolitical developments and US monetary policy signals. Federal Reserve nominee Kevin Warsh’s emphasis on central‑bank independence hints at a potential shift toward tighter policy to combat rising living costs, which could further buoy the dollar. Meanwhile, the ringgit’s mixed performance against regional peers—strengthening against the Singapore dollar and Thai baht while staying flat versus the Indonesian rupiah—underscores the nuanced impact of global risk sentiment on Southeast Asian currencies.