KUALA LUMPUR, Feb 9 — The ringgit’s upward momentum after reaching a seven-month high yesterday is expected to hit a snag next week as renewed concerns loom over the global markets amid the ongoing US-China trade war.
A dealer said despite earlier reports that the White House would send a representative to Beijing to discuss trade matters, US President Donald Trump reportedly said he was less optimistic on a trade discussion as he would not meet Chinese President Xi Jinping.
“This has led to renewed concerns among investors as it involves the two economic powerhouses, whose trade deadline is on March 1,” he told Bernama.
On December 1, 2018, both China and the US agreed to a ceasefire in their trade war after high-stakes talks at the Group of 20 summit in Argentina between Trump and Xi.
The talks have led to the 90-day trade truce including no escalating tariffs on January 1, 2019.
The dealer said that if there were no new consensus reached between the two nations on the trade deals, businesses would face the consequences because the US would raise tariffs on US$200 billion worth of Chinese imports to 25 per cent from the current 10 per cent.
The trade dispute has also caused the oil price to take a dip today as economic concerns loom in both countries.
“In the US, Trump’s poll numbers have taken a dive recently while China is under pressure as its gross domestic product grew at its slowest pace in decades, which is a worrying sign of an economic slowdown,” he said.
The ringgit is expected to trade between 4.07 and 4.08 next week due to external factors as well as profit-taking by investors.
As at 6pm yesterday, the benchmark Brent crude was at US$61.59 per barrel compared with US$62.69 per barrel yesterday.
During the holiday-shortened trading week, the ringgit finished at a seven-month high against the US dollar at 4.0670/0720 today compared with 4.0930/0980 on Thursday last week due to higher commodity prices.
Meanwhile, the local currency was traded higher against other major currencies.
The local market was closed on Tuesday and Wednesday for the Lunar New Near.
The ringgit appreciated versus the Singapore dollar to 2.9988/9029 yesterday from 3.0409/0450 on Thursday last week, inched up against the Japanese yen to 3.7023/7079 from 3.7699/7749 and rose against the euro to 4.6059/6124 from 4.7000/0070.
However, the local currency rose vis-a-vis the British pound to 5.2590/2667 from 5.3688/3758 previously as the latter currency is now being influenced by the ongoing Brexit development. — Bernama
Source: The Malay Mail Online