SPI Asset Management managing director Stephen Innes said he would maintain a “downside bias stance” for the ringgit given its close ties with the Chinese currency.
“We should expect more weakness in the coming months,” he told Bernama this morning.
The ringgit extended its positive run to begin the day at 4.6720/4.6780 to the US dollar, up from yesterday’s close of 4.6730/4.6780. This came on the back of a slight retracement of the greenback against major currencies.
However, events in Russia over the weekend, concerns over global growth and expectations of more monetary tightening by the US Federal Reserve would make the US dollar more appealing as a safe haven currency, giving it a boost.
But for now, according to Innes, the ringgit has been “surprisingly stable” despite the fact that the renminbi has reached a seven-month low of 7.2440 against the greenback amid ongoing concerns over China’s growth.
He said as investors acknowledged that the commodity supplies were still vulnerable to disruption in an uncertain geopolitical landscape in Russia, higher commodity prices were likely to help offset the China issues for the ringgit.
“However, with no signs of supply disruption, higher commodity prices could give way to a hawkish central bank narrative which is collectively on a mission to stamp down global core inflation,” he added.
The ringgit traded mostly higher against a basket of major currencies.
It increased versus the British pound to 5.9358/5.9434 from 5.9487/5.9551 at yesterday’s close and rose against the Japanese yen to 3.2560/3.2602 from 3.2624/3.2661 but was weaker vis-a-vis the euro at 5.0943/5.1009 from 5.0917/5.0971 previously.
The local note was also traded mostly higher against other Asean currencies.
The ringgit went up against the Singapore dollar to 3.4508/3.4555 versus 3.4536/3.4575 yesterday and advanced against the Thai baht to 13.2531/13.2754 from 13.2733/13.2954.
It gained versus the Indonesian rupiah to 310.9/311.5 from 311.0/311.5 but was unchanged against the Philippine peso at 8.39/8.40.