KUALA LUMPUR, June 29 ― The ringgit's performance next week is expected to be influenced by the outcome of the crucial meeting between US President Donald Trump and Chinese President Xi Jinping over the weekend.
FXTM market analyst Han Tan said an overt display of easing tensions between the two leaders should boost market sentiment and lift Asian currencies over the immediate term.
He said the ringgit would also be influenced by the Organisation of the Petroleum Exporting Countries (Opec) and its allies’ decision due next week as major producers sought to rebalance global supply-demand dynamics.
“Opec and its allies are expected to prolong production cuts into the second half of the year, which may buffer support for oil-linked currencies, including the ringgit,” he said.
On the domestic front, he said Malaysia’s external trade figures for May could offer underlying support for the ringgit provided that the data showed limited negative effects from the flare-up in US-China trade tensions in the same month.
“Should this confluence of positive catalysts for the ringgit materialise in the week ahead, US dollar/ringgit could move towards the currency pair’s 100-day moving average of 4.12, aided by the weaker greenback,” he said.
For the week just ended, the ringgit was closed mostly higher against the US dollar helped by the weaker sentiment on the greenback following a dovish comment from the US Federal Reserve on the US interest rate hike pace and optimism of a positive outcome on trade from the meeting between US and China presidents on the sideline of the G20 meeting in Osaka, Japan this weekend.
On a Friday-to-Friday basis, the ringgit strengthened to 4.1300/1350 from 4.1480/1510 against the US dollar.
It was also traded higher against most other major currencies.
The local unit appreciated against the Singapore dollar to 3.0520/0568 from 3.0545/0576, rose to 3.8354/8412 from 3.8568/8607 versus the yen, and improved versus the pound to 5.2352/2419 from 5.2505/2552.
However, the ringgit decreased vis-a-vis the euro to 4.7012/7085 from 4.6864/6915. ― Bernama