KUALA LUMPUR, June 1 — The ringgit is expected to remain pressured by developments surrounding the US-led trade tensions, in line with other Asian currencies, with the markets are already concerned by the prospects of further deterioration in global economic conditions, a dealer said.
FXTM analyst Han Tan said the ringgit-greenback continued inching towards the psychological 4.20 mark, as US President Donald Trump threatened to impose new tariffs on Mexican goods, a move that further dampens risk sentiment.
“Although Malaysia, Singapore and Vietnam were added to the US Treasurers watch list for currency manipulation this week, it is not expected to pose an immediate downside risk to the respective currencies,” he said in a statement.
He said the Nikkei Malaysia PMI reading for May, as well as April’s external trade data, both due in the coming days, might further illustrate the fact that an open and trade-dependent economy like Malaysia was not immune from the effects of the already heightened US-China conflict.
“Onshore factors are expected to take a backseat to external drivers for the ringgit with the dollar’s resilience implying that USDMYR’s path may eventually lead past the psychological 4.20 level, especially if the US opens a new front in the trade war,” he added.
The ringgit, however, was expected to continue relying on Malaysia’s resilient economic fundamentals to mitigate its performance with policymakers having sufficient buffers to prudently manage the effects from external downside risks to the domestic economy, he said.
On a Friday-to-Friday basis, the ringgit fell to 4.1890/1920 against the US dollar from 4.1870/1900 previously.
It traded mostly higher against other major currencies.
The local unit strengthened against the Singapore dollar to 3.0399/0432 from 3.0404/0431 but versus the Japanese yen, fell to 3.8512/8544 from 3.8178/8216.
The ringgit rose against the British pound to 5.2693/2748 from 5.3158/3213, and appreciated vis-a-vis the euro to 4.6703/6741 from 4.6844/6894. — Bernama
