Kuala Lumpur — The Malaysian ringgit edged slightly higher against the US dollar on Tuesday, trading within a narrow band as investors adopted a cautious stance ahead of significant geopolitical events scheduled this week.

At 6 p.m. local time, the ringgit was quoted at 4.0730/4.0775 against the greenback, improving from Monday's closing levels of 4.0755/4.0800.

Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, attributed the ringgit’s cautious movements to investor apprehension ahead of the United Nations General Assembly sessions and the anticipated meeting between US President Donald Trump and Chinese President Xi Jinping.

He noted that markets have recently adjusted to the global monetary environment shaped by interest rate hikes from key central banks, including the European Central Bank, the US Federal Reserve, and the Bank of Japan. According to Mohd Afzanizam, these developments have reinforced expectations that monetary policy will remain relatively tight until inflation rates move closer to the Federal Reserve’s target of around 2 percent.

Investors are also closely watching the potential outcomes of the Trump-Xi summit, given the ongoing tensions and negotiations surrounding US-China trade relations. These geopolitical factors are influencing market sentiment and contributing to restrained currency movements.

Overall, the ringgit's marginal gain reflects cautious market positioning as participants weigh the impact of international diplomatic engagements and the prevailing monetary policy landscape on Malaysia’s currency and broader financial markets.