The ringgit hit its previous low when it traded at RM4.348 against the US dollar on May 1, 2020, The Edge reported.

According to Bank Islam chief economist Afzanizam Abdul Rashid, the ringgit’s performance would remain poor leading up to May 3 and 4, when the United States’ Federal Open Market Committee (FOMC) meeting would be held.

“The problem that we see at the moment is that we are being bombarded with multiple views coming from US Federal Reserve officials.

“Some may prefer aggressive hikes while some would go for a steeper cut in balance sheet reduction.

“This plethora of views have clouded market judgement and this has resulted in the yield curve inversion in early April which then has resuscitated the idea of the impending recession on the horizon,” Afzanizam was quoted as saying by the financial daily.

He added that the current climate of excessive risk aversion would result in higher safe-haven currencies.

“Until the excessive uncertainties are calmed, we will continue to see a weaker ringgit in the near term.”

SPI Asset Management managing partner Stephen Innes said due to Federal Reserve chairman Jerome Powell cementing hikes of 50 basis points (bp) in May and June, there was now an influx of “hawkish” central bank speakers.

“But San Francisco Federal Reserve president Mary Daly mentioned the possibility of 75bp hikes.

“We are seeing a third 50bp hike now fully priced in for the Fed’s July meeting. We should expect 75bp pricing now creeping into May and June,” he said.

According to The Edge, he added that a 3% yield on US 10-year bonds would spell trouble for the ringgit.