KUALA LUMPUR: The ringgit is expected to trend higher next week as investors await for new catalyst following renewed prospects of the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping at next week’s G20 Summit, said an analyst.
The prospect of the meeting had triggered positive sentiment surrounding risk assets, said FXTM analyst Han Tan.
“The ringgit strengthened by about 0.3% against the US dollar this week, as the US Federal Reserve’s recent meeting indicated the possibility of a US interest rate cut over the coming months.
“The dollar’s tumble has helped the Group of 10 and Asian currencies advance further, given that the Fed’s bias towards easing its monetary policy settings has weakened support for the greenback,” he said in a note.
Tan also said the keenly-awaited Trump-Xi meeting was set to be a major catalyst for global risk sentiment in the week ahead.
“A favourable outcome that brings the world closer to a concrete resolution in the US-China trade conflict could send risk assets higher, including the ringgit,” he added.
Tan noted that for the week ahead, the ringgit’s near-term support level would be at the 4.14-level, while further weakness may be halted at the 4.17 mark.
On a Friday-to-Friday basis, the ringgit strengthened to 4.1480/1510 from 4.1650/1690 against the US dollar.
It traded mixed against other major currencies.
The local unit depreciated against the Singapore dollar to 3.0545/0576 from 3.0457/0491 at last Friday’s close, and declined to 3.8568/8607 from 3.8490/8534 versus the yen.
It improved versus the euro to 4.6864/6915 from 4.6940/6989 previously and, vis-a-vis the pound, it appreciated to 5.2505/2552 from 5.2691/2759. — Bernama