KUALA LUMPUR: The ringgit is expected to trade higher against the US dollar next week, supported by stable domestic growth drivers, gradual policy reforms and sustained current account surplus.
United Overseas Bank Malaysia (UOB Malaysia) senior economist Julia Goh said the ringgit would likely range between 4.05 and 4.10 against the US dollar in the near-term before a subsequent move towards 4.15 and 4.18 by mid- and end-2019, respectively, underpinned by the US Federal Reserve resuming its rate hikes in June and December.
“The ringgit remains undervalued compared to its peers and ringgit-denominated assets may offer safe-haven defence amid regional election events in the first half of 2019,” she said in a note.
Commenting on the US-China trade talks, Goh said the bank’s base case was for an extended period of negotiations between the world’s two giant economies with tariffs kept status quo.
Meanwhile, another dealer said the higher oil price, with international benchmark Brent crude oil now above US$65 per barrel, would also benefit the ringgit’s performance.
During the week just ended, the local unit was mostly traded lower against the US dollar due to worries over the outcome of the US-China trade talks.
However, the ringgit managed to climb to its six-month high of 4.0650/0690 against the US dollar on Wednesday after President Donald Trump commented that the US could extend the 90-day truce with China.
On a Friday-to-Friday basis, the ringgit was lower at 4.0870/0900 against the US dollar from 4.0670/0720 previously.
It also depreciated versus the Singapore dollar to 3.0082/0116 from 2.9988/9029 and weakened against the euro to 4.6110/6152 from 4.6059/6124.
However, the ringgit inched up against the Japanese yen to 3.7013/7050 from 3.7023/7079 and rose against the British pound to 5.2354/2409 from 5.2590/2667 last Friday. – Bernama
