KUALA LUMPUR, Dec 8 — The ringgit is expected to trade in a positive mood next week following a great week for local bonds, said OANDA Head of Trading Asia Pacific, Stephen Innes.

He said the market traded below 4.15 following the US and China 90-day truce to resolve their differences over trade.

At the recent G20 summit in Buenos Aires, both US President Donald Trump and his Chinese counterpart Xi Jinping, reached an agreement to hold off on slapping additional tariffs on each other’s goods after January 1, 2019, as talks continued between both countries.

"However, traders need to remember that the ringgit is directly affected by fluctuation of oil prices. Lower oil prices will affect the ringgit’s performance,” he told Bernama.

Innes said that a weaker US dollar was expected as traders were anticipating a number of interest rate increases by the US Federal Reserve next year.

"This would cause the US dollar to weaken further amid weakening economic data and heightened market volatility,” he said.

Meanwhile, FXTM Global Head of Currency Strategy and Market Research Jameel Ahmad said the ringgit, as well as other emerging market currencies, would require further positive trade truce developments for them to push forward.

"The ringgit had previously benefited in a similar way from the development of the trade truce,” he said.

He added that if the financial markets panicked if the 90-day truce were broken by either side, as this would like trigger a very sudden downturn of risk appetite — a potential to encourage the ringgit to fall towards 4.20 before year-end.

"If the positive scenario unfolds, this can lead to the ringgit advancing all the way to at least RM4.10 against the US dollar,” he said.

For the week just ended, the ringgit closed mostly mixed against the US dollar with the market sentiment moved by oil prices, the US-China trade negotiation outcome, profit-taking on the ringgit, and investor worries on global economic outlook.

On a Friday-to-Friday basis, the local note strengthened to 4.1640/1680 against the greenback from 4.1820/1870 in the previous week.

The ringgit traded mostly higher against a basket of major currencies.

It appreciated against the Singapore dollar to 3.0385/0434 from 3.0499/0546 but vis-a-vis the Japanese yen, it eased to 3.6899/6937 from 3.6843/6903.

However, the local unit improved against the British pound to 5.3116/3184 from 5.3375/3443 and strengthened against the euro to 4.7320/7373 from 4.7545/7619. — Bernama