Ringgit tracks weaker yuan against US$


  • Forex
  • Tuesday, 08 Oct 2019

KUALA LUMPUR: The ringgit opened slightly lower against the US dollar on lack of catalysts, said a dealer At 9.05 am, the local note was at 4.1930/1960 against the greenback from yesterday’s close of 4.1910/1950.

Axi Trader Asia-Pacific market strategist Stephen Innes said in the absence of a significant catalyst, Asian currencies would continue to track the yuan, which remains the best global barometer for trade war risk.

"Although markets are trying to predict a skew coming out of this week, the US-China trade meeting is virtually impossible at this stage.

"Expect headline risk to continue influencing trading flows in the yuan,” he told Bernama.

Against a basket of major currencies, the ringgit traded mostly higher at the opening.

It was lower against the Singapore dollar at 3.0351/0377 from 3.0337/0374 yesterday, but improved against the yen to 3.9048/9083 from 3.9238/9286.

The local currency gained versus the British pound to 5.1528/1569 from 5.1579/1636 and rose slightly higher against the euro to 4.5985/6022 from 4.5988/5040 previously. - Bernama

The downside risk to the ringgit remains owing to external noise even as domestic challenges continue to influence the financial market, says Ambank research.

It said in a note that the focus will be on the US FOMC meeting on Oct 30, where it expects another 25bps rate cut from the current 1.75-2.00%.

"Also, the emphasis will be on US New York Fed liquidity injection to calm the overnight repo rate which ends on 10 October," it said.

Meanwhile, Budget 2020 should set the tone for the 12th Malaysia Plan, Shared Prosperity Vision 2030 and New Industrial Master Plan besides addressing the current economic issues and growth drivers.

The macro details such as growth target, inflation and fiscal deficit/GDP for 2020 will be in focus, apart from revenue contribution and expenditure focus.

"Our MYR outlook for 2019 remains unchanged within the range of 4.15–4.23 against the USD. Our end period for the MYR is pegged at 4.19 against the USD," said Ambank.


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