KUALA LUMPUR, July 23 — The ringgit reversed yesterday’s gains to end slightly lower against the US dollar today as market sentiment was weighed by the escalating tensions between the United States (US) and China, a dealer said.
As at 6pm, the local unit ended at 4.2560/2610 against the greenback compared with 4.2505/2545 yesterday.
AxiCorp chief global market strategist Stephen Innes said despite the higher oil prices and broadly weaker US dollar, market players were cautious that the US-China tensions could bubble over and this would be bad for Asia currency risk over the short-term.
“This stuff has had a tendency to fade into the background over time. Still, the market remains guarded (players being defensive) not willing to sell the dollar/ringgit below 4.25,” he told Bernama.
As for tomorrow, Innes said the fundamental drivers of the ringgit are expected to look good as oil markets are stabilising at the top of recent ranges, while commodities are flourishing as a result of the weaker dollar.
However, the rise in US-China tensions could hold back the ringgit from pushing through 4.25 against the greenback.
“I think we (can) break 4.25 tomorrow as oil prices look to break out of their current range to the topside and stock markets continue to trend higher.
“The only risk to the view is an absolute escalation in trade war tensions,” he added.
Meanwhile, the ringgit was traded mostly lower against other benchmark currencies.
It fell against the Singapore dollar to 3.0734/0774 from 3.0692/0725 yesterday, decreased versus the British pound to 5.4166/4251 from 5.3871/3930, and weakened against the euro to 4.9331/9398 from yesterday’s 4.9064/9127.
The local unit, however, rose vis-a-vis the Japanese yen to 3.9716/9767 from 3.9721/9769 previously. — Bernama
