At 9 am(0100gmt), the local unit was at 4.1130/1170 against the greenback from 4.1155/1185 last Friday.
KUALA LUMPUR: AmBank Research expects the volatility to remain strong in the emerging markets due to the ongoing trade war noises between the US and China after US President Donald Trump escalated with fresh threats.
The research house said on Wednesday it believes both the US and China will eventually bring about differing strategies and different weapons.
“The US is expected to continue applying the direct tariffs on the goods imported while the Chinese may use other measures such as other import restrictions on US goods or services, go hard on the US companies operating in China such as boycotting, devaluing the yuan and sell US assets especially the US Treasury,” it said.
AmBank Research said with such scenarios on our plate, it expects the financial markets in the emerging region will continue to experience volatility.
In particular, it believes countries like Taiwan, Malaysia, Singapore and South Korea are more vulnerable due to strong trade link with China.
“Thus, we expect the ringgit to trade on a volatile note between our support level of 3.9885 and 3.9925 while our resistance is pinned at 4.0047 and 4.0121. Key focus for the day would be the May inflation rate and US Fed Powell speech,” it said.
Recapping Tuesday’s events, it said the ringgit fell 0.1% to 4.0025 against the USD due to the stronger dollar and the bloodbath in the global markets.
The FBM KLCI fell 1.6% to 1715.4 with net foreign outflow of RM555mil, which partly weighed on ringgit.
Meanwhile, the yield curve steepen with the 5-year MGS eased 2bps to 3.85%, the 7-year MGS remained unchanged at 4.01% while the 10-year MGS rose 1bps to 4.23%.
Crude oil price namely the WTI and Brent fell by 1.6% to US$64.82/barrel and 0.3% to US$75.08/barrel due to the US-China trade dispute.
The ringgit performed mixed against its peers as it appreciated against Singapore dollar by 0.4% to 2.9468 and baht, up 0.1% to 8.1813 but weakened against rupiah by 0.1% to 3480.72 and peso down by 0.3% to 13.3211.
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