Malaysia: Ringgit slips against greenback as US-China trade tensions grow

• May 17, 2019

KUALA LUMPUR: The ringgit opened lower against US dollar today as investors stayed on the sidelines due to external factors and as US-China trade tensions worsened.

At 9am today, the ringgit was quoted at 4.1700/1730 against the greenback compared to 4.1630/1660 at yesterday’s close.  

A dealer said the blacklisting of Chinese technology giant, Huawei, would have a negative impact on electrical and electronics manufacturing and trade, which is one of Malaysia’s main strengths.  

“The ban will escalate tensiona between the two economic powerhouses. China will definitely retaliate. From what we can see, the worse is far from over,” he told Bernama.  

Yesterday, the White House and US Department of Commerce took steps to ban Huawei from selling its technology in the American market, which could have a ripple effect on US semiconductor suppliers, including Qualcomm.

“What we are worried is that this will only aggravate the situation which has already caused a slowdown in the global economy. Malaysian companies will also be affected in the long run,” he added.  Meanwhile, the ringgit traded higher against a basket of major currencies.

The local note was firmer against the Singapore dollar at 3.0371/0404 compared with 3.0414/0447 from Thursday’s close and appreciated against the Japanese yen to 3.7916/7954 from 3.7991/8021.  
It also rose vis-a-vis the British pound to 5.3305/3360 from 5.3407/3462 and improved against the euro to 4.6591/6642 from 4.6667/4713. – Bernama

Ambank research expects the ringgit to trade between its support level of 4.1477 and 4.1534 while its resistance is pinned at 4.1700 and 4.1764.

The research house commented that although Malaysia’s 1Q GDP results beat expectations, growth was supported mainly by agriculture and government spending, while other economic activities moderated.

However, it said the Bank Negara measures on financial market liberalisation is seen as positive.

Meanwhile, the ongoing trade conflict coupled with US President Donald Trump’s national emergecy over threats to American technology will be on investors’ radar screens.

Source: https://www.thestar.com.my/business/business-news/2019/05/17/ringgit-slips-against-greenback-as-us-china-trade-tensions-grow/#7PldxcEV7tghGJ4K.99