Budget 2020 main driver to ringgit performance the coming week

The ringgit ended the week higher at 4.1840/1870 to the greenback but was mostly lower against other major currencies. — Picture by Ahmad Zamzahuri
The ringgit ended the week higher at 4.1840/1870 to the greenback but was mostly lower against other major currencies. — Picture by Ahmad Zamzahuri

, Oct 5 — Budget 2020 which will be tabled next Friday will be the main driver for the ringgit next week, said a market analyst.

FXTM market analyst Han Tan said investors will be looking for any fiscal stimulus that could offset the external economic headwinds, as well as the government’s projections for next year’s fiscal deficit.

“The ringgit may react positively to policies that can foster domestic demand, considering that recent import data have shown on-year contractions for consumption and capital goods for three consecutive months through August,” he told Bernama.

On the external front, the market is also buoyed with the upcoming trade talks between the US and next week which could set the tone for risk appetite for the rest of 2019.



“Headlines that show both sides drawing closer to a trade deal would encourage market sentiment and drive up risk assets in the near-term,” he said.

US Trade Representative Robert Lighthizer is also set to meet Vice Premier Liu He on Oct 10 to further discuss the trade issues grappling the world’s two largest .

For the week ahead, Han said that the ringgit might test the USD/MYR 4.20 resistance level, while more moderation could send the currency pair towards the 4.16 support level.

For the week just ended, the local note was mostly lower throughout the week, mainly influenced by the uncertainties in the United States-China trade talks, weakened US services data which triggered recession fears, a possible rate cut by the US Federal Reserve as well as the upcoming Budget 2020 announcement.

The ringgit ended the week higher at 4.1840/1870 against the greenback compared with 4.1860/1900 yesterday last week.

The local currency, however, traded lower against other major currencies.

It slid against the dollar to 3.0332/0363 from 3.0292/0325, declined versus the euro to 4.5928/5977 from 4.5732/5793, and fell against the pound to 5.1631/1680 from 5.1433/1499.

Vis-a-vis the yen, the local unit contracted to 3.9194/9230 from 3.8774/8818 previously. — Bernama



Source: The Malay Mail Online





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