KUALA LUMPUR: The ringgit is expected to move towards its immediate support level of RM4.36 against the US dollar in the coming week, driven by optimism surrounding a less aggressive tariff trade approach by Donald Trump’s administration.
This follows the United States president’s comments about a potential new US-China trade deal, with markets anticipating a more targeted and gradual approach to high import tariffs.
Trump also reportedly said that he expects Chinese President Xi Jinping to visit the US, although he did not provide a timeline for the trip.
Russia and the US on Tuesday agreed to start working toward a peace deal, with US Secretary of State Marco Rubio saying the two sides agreed broadly to create a high-level team to support the Ukraine peace talks.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid views the move positively, on top of Trump’s efforts to end the war in Ukraine.
“If this positive momentum continues, the ringgit is expected to move higher.
“However, several Federal Reserve (Fed) officials are scheduled to speak at public forums, and their views on interest rate direction and US monetary policy could influence financial markets, including foreign exchange markets,” he told Bernama.
For the week just ended, the ringgit was mostly higher to end the week near a three-week high.
The ringgit strengthened by 0.4 per cent against the US dollar since last Friday, despite expectations that the Fed will keep interest rates steady in the near term.
This is attributed to the strong performance of the US economy and inflation remaining above the 2.0 per cent target, as indicated in the minutes from January’s Federal Open Market Committee (FOMC) meeting.
The ringgit appreciated to end the week at 4.4165/4200 from 4.4310/4385 the previous week.
Meanwhile, the local currency was mostly lower against major currencies.
It weakened against the British pound to 5.5851/5895 from 5.5769/5863 and slipped versus the Japanese yen to 2.9346/9371 from 2.9048/9099 last week.
However, it strengthened against vis-a-vis the euro to 4.6236/6273 from 4.6437/6515 previously.
The ringgit also rose against most ASEAN currencies.
It appreciated against the Indonesian rupiah to 270.7/271.0 from 272.6/273.2 and versus the Singapore dollar to 3.3021/3049 from 3.3055/3113.
It also edged up against the Philippine peso to 7.62/7.63 from 7.66/7.68 and was up vis-a-vis the Thai baht to 13.1354/1528 from 13.1761/2059.
