Ringgit gains as US dollar is hit by protests


ASIAN currencies are expected to gain momentum against the greenback amid the turmoil in the US and its domestic markets.

Kenanga Investment Bank Bhd expects the ringgit to technically depreciate against the US dollar by 0.12% to 4.352 for the week, suggesting a reversal toward a bearish trend for the local currency.

“The ringgit closed higher against the US dollar last week despite the deepened China-US rift and declining Brent crude oil prices.

“Asian currencies including ringgit are gaining momentum on dwindling interest in the US dollar on the back of the risk-on environment,” it said.

In addition, the research note said US President Donald Trump’s announcement on China last Friday could worsen the US-China feud and increase the global risk aversion, prompting the ringgit to reverse course against the US dollar this week.

For the long-term projection, the research house said the ringgit could be sustaining at 4.325 and 4.302 for the third and fourth quarter of this year respectively.

AxiCorp Financial Services Pte Ltd chief market strategist Stephen Innes said the sentiment of the ringgit is expected to gradually improve over the weakening US dollar.

“The ringgit appears destined to be caught in the risk-on risk-off vortex over the short term.

“But with oil prices stabilising on Saudi Arabia and Russian pledge to remain compliant and a less combative response from Trump to the Hong Kong law, local currency sentiment should gradually improve even more so if the US dollar continues to lose its safe-haven appeal,” he said in a note yesterday.

The ringgit rose slightly against the greenback yesterday on subtle demand for the local currency as an increase in global oil prices helped lift market sentiment towards the ringgit.

At 5.45pm, ringgit closed 0.75% higher at 4.314 against the greenback. Major cities in the US have been put under curfew after protestors took to the streets against police brutality as a videotape of the death of an African-American man at the hands of a Minneapolis police officer surfaced.

Police fired teargas outside the White House as confrontation worsened between police and protesters after Trump labelled the instigators of the nights of rioting as “domestic terrorists”.

Washington’s mayor had ordered a curfew between 11pm and 6am while a report mentioned that Secret Service agents had rushed Trump into an underground bunker at the White House last Friday night during an earlier protest.