The ringgit recorded a decline against the US dollar but recovered against other major currencies amid cautious sentiment ahead of the People's Bank of China (PBoC)'s (PBoC) rate decision on Monday.
At 10.05am, the ringgit was at 4.5000, down 0.07% against the USD from its close of 4.4975 at the end of last Friday.
Managing Director of SPI Asset Management, Stephen Innes said investors were closely monitoring the PBoC, especially after the central bank allowed the Chinese yuan to break through the key level of 7.30 last Friday.
The PBoC's decision refers to the central bank's daily setting of the yuan's reference rate against a basket of currencies, a move closely watched by the market as it signals Beijing's stance on currency management.
He added that the latest adjustment weakened the offshore yuan by pushing it past 7.35 against the US dollar and had a significant upward impact on the entire Asean economy.
As the yuan continues to weaken against the backdrop of rising US yields, the ringgit and other closely-linked Asean currencies may face significant downside pressure.
Furthermore, the yuan's position influences the broader Asian currency movement and the ringgit may face similar problems.
Meanwhile, the ringgit also strengthened against other major currencies.
It rose against the Japanese yen to 2.8496/8601 from Friday's close of 2.8606/8643, rose against the British pound to 5.5771/5970 from 5.5800/5869 previously and strengthened against the euro to 4.6259/64248 from 4.6259/64248.
Gains were also seen against Asean currencies.
The ringgit rose to 13.0112/0731 against the Thai baht from 13.0540/0753 and strengthened to 277.1/278.2 against the Indonesian rupiah from 277.6/278.1.
Against the Singapore dollar, the ringgit rose to 3.2745/2869 from 3.2828/2871 and edged higher to 7.71/7.75 against the Philippine peso from 7.73/7.74 previously.
