Ringgit rises on de-escalation of trade tensions

  • Business Premium
  • Wednesday, 12 Jun 2019

Bank Negara Malaysia's international reserves rose by US$600mil to US$103.3bil as at July 15, 2019 from two weeks prior.

KUALA LUMPUR: The ringgit rose against the US dollar on Wednesday morning as fears of a trade war between the US and Mexico simmered down, a dealer said.

At 9am, the ringgit was at 4.1600/1650 against the greenback from 4.1610/1650 at Tuesday's close.

OANDA senior market analyst, Alfonso Esparza said the dollar traded higher after Washington brokered a deal on migration with its North American neighbour which avoided painful tariffs on Mexican goods.

With the de-escalation of tension with Mexico, the US can now focus on the US-China trade dispute.

"The negotiations between the two super-powers don’t have a set date, and with the G20 in Japan fast approaching, the chance there is a positive announcement is uncertain," he said.

At the opening, the ringgit, however, traded lower against a basket of major currencies.

It depreciated against the Singapore dollar to 3.0503/0551 from 3.0484/0522 at last Tuesday's close, lower versus the yen to 3.8334/8391 from 3.8283/8324 and weakened against the euro to 4.7133/7194 from 4.7086/7148.

Vis-a-vis the pound, the local unit was lower at 5.2932/3000 to 5.2874/2941 at last Tuesday's close. - Bernama

According to Ambank research, expectations for rate cuts by the US Federal Reserve are at a high following Friday's weak US payrolls report. 

It said the focus will be on US May’s inflation data which is scheduled to be released today where market expects headline inflation to come in at 1.9% y/y (April: 2.0%) while core inflation is forecasted at 2.1% y/y (April: 2.1%).

"In our view, should the inflation data fail to meet expectation, it will raise our current 60% probability for a rate cut in July to a much higher level," it said.

The research house added it has priced in one rate cut in September and another in January with a 90% probability of happening.

For today, it expects the ringgit to trade between a support level of 4.1519 and 4.1582 while its resistance is pegged at 4.1656 and 4.1734. 

Its main focus will be on European central Bank president Mario Draghi's speech.

Article type: metered
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

Proton delivers 100,566 cars year-to-date Premium
Sunway Carnival Mall to double retail space, 95% confirmed occupancy so far Premium
EPF branches in KL and Labuan to close on Dec 3 Premium
Grab's Nasdaq debut to set tone for Southeast Asian tech listings Premium
Asian shares tick up, U.S. and European futures diverge on Omicron jitters Premium
Bank Negara and all banks in KL to remain open on Dec 3 Premium
MyPay partners Pusat Pungutan Zakat-MAIWP for cashless zakat payments Premium
FBM KLCI stays subdued amid growing headwinds Premium
China's Kaisa struggles for relief from bond holders as default risk looms Premium
China property market to keep cooling into H1 2022 on tight curbs Premium

Others Also Read