Ringgit expected to trade cautiously against the US dollar next week

THE ringgit is expected to trade cautiously against the US dollar next week, with investors closely monitoring developments related to Covid-19, the US-China trade tensions and the country’s first-quarter gross domestic product data (GDP).

Financial services firm AxiCorp’s chief global market strategist Stephen Innes said the focus would also be on China’s retail sales and industrial production to be released next Friday, which is anticipated to come out fine as signs of life in mainland resonate.

“There will be pre-trade jitters early next week ahead of the US-China trade chiefs’ call but it should not be too much of an obstacle as China is set to confirm its obligation to fulfil the limited phase one trade deal commitment.

“I think the ringgit will trade defensively but should improve as crude oil prices continue to stabilise and China data round out the week on a positive note,” he told Bernama.

Bank Negara Malaysia will release Malaysia’s first-quarter GDP data on Wednesday, May 13, 2020.

Another financial trader said the country’s first-quarter GDP is forecasted to be weak as the country’s economic activities had been significantly dampened by the Covid-19 pandemic and the imposition of the Movement Control Order (MCO) to contain the spread of the virus.

The highly-infectious coronavirus which was first detected in Malaysia in January had forced the government to introduce the MCO which required the people to stay indoors and businesses to shut their operations, as the country strived to flatten the curve of transmissions. 

The pandemic has also forced the country to shut its borders, bringing the lucrative tourism sector to a halt.

“The lockdown which happened in almost all countries throughout the world has reduced business activities and badly affected the tourism sectors,” he told Bernama.

Meanwhile, on a Friday-to-Thursday basis, the local currency ended mostly lower against a basket of currencies.

It was lower against the US dollar at 4.3310/3370 from 4.2950/2050 on Thursday last week and weakened against the Singapore dollar to 3.0645/0696 from 3.0461/0543.

The ringgit depreciated versus the Japanese yen to  4.0716/0780 from 4.0253/0358 and was lower against the euro at 4.6948/6022 from 4.6639/6765.

However, the local note appreciated vis-a-vis the British pound to 5.3626/3718 from 5.3675/3808. – May 9, 2020, Bernama

 

 

 

 

 

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