Ringgit to be range bound against US dollar next week

On a Friday-to-Friday basis, the ringgit fell to 4.1870/1900 against the US dollar from 4.1750/1780 previously. — Picture by Saw Siow Feng
On a Friday-to-Friday basis, the ringgit fell to 4.1870/1900 against the US dollar from 4.1750/1780 previously. — Picture by Saw Siow Feng

KUALA LUMPUR, May 25 ― The ringgit is expected to be range bound against the US dollar next week on US-China trade tension fears.

The market operated on a holiday-shortened week as it was closed on Monday for Wesak Day and Wednesday for Nuzul al-Quran holidays.

Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said global equities took a sharp turn downwards on Thursday, furthering the global sell-off as the latest ban on Chinese telecommunications giant Huawei saw greater deterioration in the relationship between the US and China.

“We believe the current geopolitical climate forces investors to be on the defensive by taking a tighter grip on sentiment,” he told Bernama.

Meanwhile, FXTM analyst Han Tan said Asian markets soured further yesterday, as US stocks closed lower on mounting fears that the prolonged US-China trade tensions could have a more drastic impact on the global economy.

The selloff this month indicates that markets are pricing in the prospects of a ramp-up in the US-China conflict, as both sides appear to be digging in their heels of late.

It was reported that China’s Commerce Ministry said yesterday that more efforts should be made to achieve the goal of stabilising trade, while improving its quality, adding, the trade environment was growing more uncertain and challenging.

Oil prices recovered slightly yesterday amid the Organisation of the Petroleum Exporting Countries (Opec) supply cut and Middle East tensions, but still did not fully recoup losses from earlier in the week on economic slowdown jitters.

Tan said investors had been trimming exposure to riskier assets and seeking refuge in safe havens, with gold jumping over one per cent above the psychological US$1,280 (RM5,361) level, while yields on the benchmark 10-year US Treasuries are now at their lowest since October 2017.

“Demand-side risks are set to feature prominently in the upcoming decision by oil producers on whether to maintain production cuts going into the second half of the year,” he added.

On a Friday-to-Friday basis, the ringgit fell to 4.1870/1900 against the US dollar from 4.1750/1780 previously.

It traded mostly higher against other major currencies.

The local unit weakened against the Singapore dollar to 3.0404/0431 from 3.0335/0368 and versus the Japanese yen, fell to 3.8178/8216 from 3.8051/8093.

The ringgit rose against the British pound to 5.3158/3213 from 5.3265/3324, but depreciated vis-a-vis the euro to 4.6844/6894 from 4.6601/6652. ― Bernama

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