KUALA LUMPUR, Dec 28 â€” The ringgit is expected to trade higher against the US dollar next week on positive US-China trade deal development, a dealer said.
AxiTrader chief Asia market strategist Stephen Innes said the outlook for the ringgit remained positive as trade risk had abated and with the expectation of a weaker US dollar in 2020.
â€œIâ€™m not expecting any explosive gains until we see a more significant chunk of US tariffs rolled back that will definitely cause a significant impact on Malaysia trade flows.
â€œThe â€˜Phase Oneâ€™ of US-China trade deal should benefit the ringgit in the form of small pick up in trade and equity inflows as business owners start putting capital to work as they are sure no more tariffs will happen,â€ he told Bernama.
However, he said the ringgit had remained undervalued relative to regional peers due to a tighter correlation to the Chinese yuan.
â€œUntil the yuan strengthens, the ringgit remains hostage,â€ he said, adding the ringgit was expected to trade at between 4.12 and 4.15 against the greenback next week.
For the week just-ended, the ringgit was traded at its lowest of 4.1410/1440 against the US dollar for the week on Monday before settling at the weekâ€™s strongest of 4.1260/1290 yesterday.
The ringgit also settled the week higher against 4.1380/1420 recorded yesterday of the previous week.
The local market was influenced mainly by external factors, particularly the US-China trade deal development.
Meanwhile, on a Friday-to-Friday basis, the local currency was traded mostly higher against a basket of other major currencies.
The ringgit rose against the Singapore dollar to 3.0491/0524 from 3.0518/0559 and appreciated against the Japanese yen to 3.7680/7718 from 3.7842/7889.
The local unit improved versus the British pound to 5.3927/3970 compared with 5.3955/3024 and strengthened against the euro to 4.5951/6001 from 4.6010/6067 previously.
The market was closed on Wednesday this week for Christmas Holiday and will be closing on Wednesday next week for the New Year celebration. â€” Bernama