Friday 29 Mar 2024
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KUALA LUMPUR (Nov 10): The ringgit depreciated to its weakest point so far today at 4.2537 against the US dollar after Republican candidate Donald Trump won the US presidential election. Anticipation of a near-term Malaysian interest rate cut could have also hit the ringgit.

Analysts said Trump's victory against Democratic candidate Hillary Clinton had created uncertainty on US policies on world political and economic backdrops. 

"Trump’s victory could be viewed as the second ‘Brexit’. Global markets are reacting negatively initially due to their belief that Clinton would win," AmBank (M) Bhd research head Anthony Dass and equity strategist Joshua Ng wrote in a note today.

Bloomberg data showed that the US dollar-ringgit exchange rate so far today was between 4.2343 and 4.2537.

The AmBank analysts said : "Our assessment shows the low end of MYR intraday swing on the ‘base’ case is around 4.30 and with the ‘worst’ case at 4.50 against the USD in December. We are maintaining our 2016 and 2017 MYR against the USD full-year forecast at 4.08-4.09 and 4.11-4.13 respectively."

Bank Negara Malaysia's monetary policy is also closely watched. The Ambank analysts said AmBank saw a "40% probability" of a 25 basis point cut in the overnight policy rate (OPR) when Bank Negara's monetary policy committee meets this November 23.

In July this year, Bank Negara cut the OPR to the current 3% from 3.25%. Tomorrow (Nov 11), the central bank will announce Malaysia's third quarter economic numbers.

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