Ringgit to stay under US dollar pressure

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KUALA LUMPUR, July 3, 2015:
The ringgit is likely to face continuous pressure despite Fitch Ratings’ upgrading Malaysia’s sovereign rating outlook to stable from negative.ForexTime Ltd chief market analyst Jameel Ahmad said the ringgit was now entering the third quarter and edging very close to an anticipated US interest rates increase.In a statement here today, he said the second quarter would see the ringgit enjoying moments of revival, as traders became impatient with the US dollar.” Confirmation that Fitch had maintained Malaysia’s credit rating at the same level of “A-“, led to a sharp rebound in the ringgit, with the risk of it being short-lived.“This is mainly due to the falling momentum in the price of West Texas Intermediate which will inspire a decline in the currencies of economies linked to commodity exports.”

He said there was nothing in the US economic data that could provide a reason for the US Federal Reserve to delay interest rate increases.“This will result in pressure on emerging market currencies as anticipation rises again over when the Fed would finally tighten policy.”The ringgit was easier against the greenback yesterday, dampened by renewed concerns over the overnight tumble in crude oil prices. It was quoted at 3.7760/7800 against 3.7480/7530 on Wednesday.The crude oil price was now hovering at US$64 per barrel, down by about half from the US$115 in June last year.

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