In the early hours of a Monday trading session, Malaysia's ringgit retreated against the US dollar as geopolitical tremors — stalled US-Iran negotiations and the specter of a Strait of Hormuz blockade — sent traders seeking the familiar shelter of the greenback. The movement was small in measure but large in meaning, reflecting a global mood turning inward toward caution. When the world's critical oil passages feel threatened, markets do not wait for certainty; they price in fear first.
Ringgit weakens against dollar amid geopolitical tensions and safe-haven demand
When geopolitical risk spikes, traders sell riskier assets and buy US dollars.
Mark
So the ringgit weakened against the dollar but strengthened against other currencies. That seems contradictory. What's actually happening?
Mimi
It's not contradictory—it's the dollar getting stronger across the board. When geopolitical risk spikes, traders sell riskier assets and buy US dollars. The ringgit weakens against the dollar because everyone wants dollars. But the ringgit might still strengthen against the pound or yen if those currencies are falling faster.
Luke
Right, but we should be clear: the ringgit moved from 3.9625 to 3.9695. That's a depreciation of about 0.18 percent. It's real, but it's not dramatic. The economist said it "could" revisit RM4.00, but that's a prediction, not a fact.
Mark
What's driving the safe-haven demand? Is it just the Iran situation?
Mimi
Stalled US-Iran negotiations, reports of a potential blockade of the Strait of Hormuz, oil prices spiking above $100 a barrel—it all adds up. When traders see geopolitical risk, they move money to safety. The dollar is the safest place.
Luke
The blockade was reported to begin that same day at 10 am Eastern Time. So this wasn't hypothetical—it was imminent. That's why the reaction was immediate.
Mark
Does this mean the ringgit will keep weakening?
Mimi
The economist thinks so, at least in the short term. He called it a "risk-off mode." When that's the sentiment, emerging market currencies like the ringgit tend to underperform.
Luke
But that's a forecast, not a guarantee. The actual data we have is one morning's trading. The broader trend depends on how the blockade plays out, whether negotiations resume, what happens to oil prices. We're looking at a snapshot, not the full picture.
The Pulse
- Stalled US-Iran nuclear talks and reports of a possible American blockade of the Strait of Hormuz injected sudden urgency into global markets, pushing crude oil above $100 per barrel for the first time in months.
- Risk-averse traders abandoned emerging-market positions and rushed toward the US dollar, lifting the Dollar Index to 99.115 points and pulling the ringgit down to 3.9695 — a retreat that belied its otherwise steady morning against the pound, euro, and yen.
- Bank Muamalat's chief economist warned that the risk-off sentiment was deepening, raising the prospect of the ringgit revisiting the psychologically significant RM4.00 threshold against the greenback.
- The blockade, if enacted, was set to disrupt all maritime traffic at Iranian ports across the Arabian Gulf and Gulf of Oman beginning April 13 — a timeline that gave markets little room to breathe or recalibrate.
In the early hours of a Monday trading session, Malaysia's ringgit retreated against the US dollar as geopolitical tremors — stalled US-Iran negotiations and the specter of a Strait of Hormuz blockade — sent traders seeking the familiar shelter of the greenback. The movement was small in measure but large in meaning, reflecting a global mood turning inward toward caution. When the world's critical oil passages feel threatened, markets do not wait for certainty; they price in fear first.
Malaysia's ringgit opened the trading week on uneven ground. Against the British pound, the euro, and the Japanese yen, it held firm or edged higher. But against the US dollar, it slipped — falling to 3.9695 from 3.9625 at Friday's close — and that single retreat told a larger story about where global sentiment was heading.
The driver was geopolitical. US-Iran negotiations had stalled, and reports emerged that President Trump was weighing a blockade of the Strait of Hormuz, one of the world's most vital corridors for oil and gas. Markets responded swiftly: WTI and Brent crude both climbed above $100 per barrel, and the US Dollar Index rose 0.47 percent to 99.115 points as traders sought the safety of the greenback.
Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, described the mood plainly — risk aversion was setting in, and in such moments, the dollar becomes the world's default refuge. He cautioned that the ringgit could face further depreciation pressure and might even revisit the RM4.00 level, a threshold carrying both numerical and psychological weight.
Within the region, the picture was mixed. The ringgit gained against the Singapore dollar and Thai baht but lost ground to the Indonesian rupiah and Philippine peso. What the morning ultimately revealed was a currency navigating competing currents — resilient in some directions, retreating in the one that mattered most, carried backward by a tide it could not control.
The ringgit began the trading day on mixed footing. Against most major currencies, Malaysia's currency held its ground or improved slightly. But against the US dollar, it slipped—a small retreat that carried outsized meaning given what was driving the markets that morning.
At 8 am, the ringgit weakened to 3.9695 against the greenback, down from 3.9625 at the previous Friday's close. The shift was modest in numerical terms, but it reflected a larger reorientation in how traders were thinking about risk. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, explained the dynamic plainly: traders were becoming more risk-averse, and when that happens, they reach for the US dollar. It is the world's safest harbor in uncertain times.
The uncertainty in question was geopolitical. Negotiations between the United States and Iran had stalled, and reports suggested that President Donald Trump was considering a blockade of the Strait of Hormuz—one of the world's most critical chokepoints for oil and gas shipments. The economic logic was straightforward: squeeze Iran's ability to export energy, and you squeeze Iran's economy. The market's response was immediate. Both WTI and Brent crude oil benchmarks climbed above $100 per barrel. The US Dollar Index, which measures the greenback's strength against a basket of major currencies, rose 0.47 percent to 99.115 points.
Rashid told reporters that the ringgit would likely remain cautious in the near term. The risk-off sentiment was becoming pronounced. He predicted the local currency could see further depreciation against the dollar and might even revisit the RM4.00 level—a psychological threshold that would represent a meaningful weakening. The blockade, if implemented, was set to begin on April 13 at 10 am Eastern US Time, affecting all maritime traffic at Iranian ports across the Arabian Gulf and the Gulf of Oman.
Against other major currencies, the ringgit performed better. It strengthened to 5.3167 against the British pound, improved to 2.4858 against the Japanese yen, and rose to 4.6344 against the euro. Within Southeast Asia, the picture was more uneven. The ringgit appreciated against the Singapore dollar and the Thai baht but weakened against the Indonesian rupiah and the Philippine peso.
What emerged from the morning's trading was a portrait of a currency caught between competing forces—stronger in some quarters, weaker in others, but overall pushed downward by the same tide that was lifting the dollar. The geopolitical risk was real, the oil markets were responding, and traders were making their bets accordingly. For Malaysia's currency, that meant a day of caution and, in the direction that mattered most, a step backward.
Notable Quotes
Risk aversion among traders is becoming more pronounced following stalled negotiations between the US and Iran. Historically, such developments tend to trigger safe-haven demand for the greenback.— Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia
It is going to be a risk-off mode today, and the ringgit could see depreciation against the greenback and perhaps revisit the RM4.00 level.— Mohd Afzanizam Abdul Rashid
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Economy & Finance