Ringgit to ride on external factors next week

KUALA LUMPUR: The ringgit is expected to be influenced by external factors next week with major events happening in the monetary and geopolitical space, a dealer said.
Oanda Head of Trading in Asia-Pacific Stephen Innes said the market would be buckling up for a busy week ahead from the US central bank policy meeting to one of the most geopolitically essential summits, the Trump-Kim summit, in Singapore.
"The market is going in with a positive vibe, but which makes the tail risk that much more significant, if talks collapse," he told Bernama.
He said investors would also monitor the development of trade talks from the Group of Seven (G7) and ongoing US-China trade negotiations, as well as outcome from the US Federal Reserve (Fed) and European Central Bank's (ECB) meetings.
Innes said the Fed is widely expected to announce an interest rate hike next Wednesday, but investors would be keeping to forward guidance, for clues as to whether it could raise rates a fourth time this year.
"The market will also be watching the ECB's meeting as it is widely expected that the removal of quantitative easing would be discussed.
"Next week is massive. I expect the current range to hold, but with the USD/MYR to gravitate to the top side of the spectrum, exposing a possible move through 4.00 (ringgit vis-à-vis US dollar) if the Trump-Kim summit fails and either the ECB or the Fed are more hawkish than expected," he added.
Meanwhile, FXTM Global Head of Currency Strategy and Market Research Jameel Ahmad said locally, investors would be monitoring the retail sales figures to be released on Tuesday.
"The retail sales data is seen as a crucial indicator of consumer sentiment and a stronger than expected reading would help improve optimism that the Malaysian economy can expand above five per cent in 2018.
"The current forecast is that retail sales should have increased by around eight per cent in April," he added.
On a Friday-to-Friday basis, the local note eased against the greenback to 3.9870/9900 from 3.9770/9800.
It declined against the Singapore dollar to 2.9836/9881 from 2.9728/9761 and depreciated against the yen to 3.6468/6505 from 3.6393/6430.
The local note weakened vis-a-vis the British pound to 5.3482/3534 from 5.2902/2946 and decreased against the euro to 4.6903/6946 from 4.6551/6594. — Bernama