Ringgit Tumbles Amid West Asia Conflict Fears

The ringgit eased against the US dollar on Wednesday as market sentiment remained cautious due to an evolving outlook in West Asia, according to Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd.

The local currency traded at 4.0670/0720 against the greenback from Tuesday's close of 4.0605/0640. Brent crude prices hit the psychological level of US$100 a barrel as the conflict between US-Israel and Iran continues, leading to uncertainties over crude oil supplies.

This development suggests a risk of elevated inflation rates induced by higher energy prices, which could result in a tighter monetary policy stance by the Federal Reserve and Bank of Japan next week. The US consumer price index (CPI) print on Friday will be a key data point to watch, with consensus estimates pencilling in headline inflation at 3.4 per cent for August.