THE ringgit is likely to trade at current levels next week and is poised to reach the 4.30 level should risk-on sentiment hold and the US dollar continuing to decline.
He said the upcoming US May non-farm payrolls announcement was unlikely to sway the greenback much, considering that investors had largely looked past the soaring unemployment in the US.
“However, should President Trump’s press conference prove to be more bark than bite, that could allow the US dollar to resume its decline as risk-on fervour allows more breathing space for Asian currencies,” he told Bernama.
Over the week, most Asian currencies were able to take advantage of the waning interest in the US dollar, as the local note broke below its 50-day moving average against the greenback, and traded below the 4.35 psychological level.
“Risk-on sentiment has been taking hold in global markets, allowing Asian currencies to push back against the US dollar,” Tan said.
On Monday, Asian markets will offer their reactions to President Trump’s announcement due later Friday, which could have a major bearing on global markets.
A resurgent US dollar, fuelled by risk aversion, could see Asian currencies falter, Tan said.
On a weekly basis, the ringgit ended mostly lower against a basket of currencies.
It appreciated against the US dollar to 4.3450/3500 on Friday from 4.3610/3690 a week earlier but slipped against the euro to 4.8369/8433 from 4.7562/7667.
The local currency was slightly higher versus the Japanese yen at 4.0528/0586 from 4.0567/0653 a week ago, but edged down against the Singapore dollar to 3.0768/0810 from 3.0638/0698 and depreciated against the British pound to 5.3435/3514 from 5.3078/3118 previously. – May 30, 2020, Bernama
