Analysts say the ringgit is in for another bout of weakness with a depreciation in the Chinese yuan possibly pushing the ringgit to surpass 4.8 to the US dollar levels, amid a delay in US rate-cuts.
The ringgit traded at 4.7650 against the US dollar at noon today, down from 4.7490 against the dollar at noon on April 9, 2024.
SPI Asset Management managing director Stephen Innes said the local note may continue to weaken until the Federal Reserve signals a rate cut, a move that will only happen in the event of inflation easing or a significant deterioration in US economic data, possibly in the fourth quarter.
Higher-than-expected US inflation has dimmed hopes for a June rate-cut.
“With the US dollar acting as one wrecking ball and the potential for a weaker yuan acting as another, Asian currencies could face significant pressure,” he told Business Times.
Innes said two scenarios could play out, the first, if the People’s Bank of China (PBoC) allows the yuan to depreciate, it could result in the US dollar surpassing 4.80 against the ringgit.
“With the US dollar acting as one wrecking ball and the potential for a weaker yuan acting as another, Asian currencies could face significant pressure,” he told Business Times.
Innes said two scenarios could play out, the first, if the People’s Bank of China (PBoC) allows the yuan to depreciate, it could result in the US dollar surpassing 4.80 against the ringgit.
Source: nst.com.my
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