KUALA LUMPUR, June 20 ― OCBC Bank expects ringgit to edge higher against the US dollar in the coming months along with the rest of other Asian currencies before lingering around 4.1641 level against the greenback by year-end.
The bank also said that it does not see excessive depreciation pressures on the local note that are out of line from its Asian counterparts.
Commenting on the outlook for the Asian economy, OCBC economist Terence Wu said the macro outlook continues to look uninspiring as the US-China trade tensions remain a potential flashpoint and may impinge on the macroeconomic readings further.
“The hope is for recovering China to act as an anchor of stability, and for growth to pick up sufficient momentum to filter down towards the rest of Asian economies.
“This scenario, however, is predicated on the trade tensions blowing over,” he said in a statement.
Asian central banks noted Wu, are now more open towards rate cuts to support the growth impetus.
Apart from the macro considerations, Asian central banks may also be encouraged by the shift in posturing by the US Federal Reserves and other major central banks.
Nevertheless, OCBC expects the easing bias to be carefully calibrated, so as to avoid undue concerns over the macro picture and prompt risks of capital outflows.
Given the spectre of a trade war and soft economic outlook, there may be few positives for Asian currencies as a whole, it added. ― Bernama