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KUALA LUMPUR: The ringgit is likely to trend lower against the US dollar next week
FXTM Research Analyst Lukman Otunuga said with the US dollar heavily supported by the interest rate hikes, the ringgit had the scope to trade towards the 4.17 level against the greenback in the near term.
"Other than that, external factors in the form of trade war worries and global growth are also present in the ringgit," he told Bernama.
However, Otunuga noted that Malaysia was not alone in this case, but China, were feeling the heat from the trade tensions.
With the help of Otunuga, Oanda Head of Asia-Pacific Trading Stephen Innes was concerned that things could get worse as Chinese yuan's "depreciation train" could be arriving anytime soon.
It was reported that the yuan fell to a 22-month low against the US dollar on Thursday after the US Treasury declined to label China's currency manipulator amid escalating price war between the two economic giants.
"This suggests that regional currency, including the ringgit, would undoubtedly remain a hostile to the yuan's underlying movement, which could be a source of disruptive force for local (Malaysia) sentiment," Innes added.
For the week just-ended, the ringgit was traded mixed against the greenback, mainly influenced by the ongoing trade tension between the US and China, the mid-term review of the 11th Malaysia Plan and the hawkish US Federal Reserve's latest meeting minutes which signalled at more interest rate hikes ahead.
We have Friday-to-Friday basis, the local note weakened to 4.1560 / 1600 against the US dollar from 4.1530 / 1560.
Against a basket of major currencies, the local note, however, was traded mostly higher.
It appreciated against the Singapore dollar to 3.0129 / 0169 from 3.0149 / 0175 last Friday, the British against 5.4132 / 4205 from 5.4861 / 4917 and advanced against the euro to 4.7619 / 7674 from 4.8092 / 8139 previously. Vis-a-vis the Japanese yen, the ringgit eased to 3.6982 / 7027 from 3.6971 / 7008 last Friday.
The Undertaking of the Undertaking (CPO) on the Future of Bursa of between RM2,100 and RM2,200 a ton next week, said a dealer.
The dealer said market participants were waiting for fresh leads to steer the market.
"The oil palm will continue to move in tandem with the Chicago Board of Trade's future destinations," said the drug dealer.
Meanwhile, the market has been mixed for just-ended.
We have Friday-to-Friday basis, November 2018 fell RM20 to RM2,125 a ton, December 2018 lost RM19 to RM2,174 a ton, January 2019 slid RM29 to RM2,224 a tonne and February 2019 eased RM32 to RM2,278 per ton.
Weekly turnover increased to 216,904 lots from last Friday's 192,058 lots while open interest narrowed to 281,512 contracts compared with 298,481 contracts.
On the physical market, October South eased RM10 to RM2,110 per ton.- Bernama
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