KUALA LUMPUR (Oct 15): Affin Hwang Investment Bank Bhd revised its ringgit forecast to RM4.20 against the US dollar by end-2020 from RM4.10 previously, in anticipation the US will not cut interest rates aggressively and amid US-China trade war uncertainty.

According to Affin Hwang's note today, anticipation of aggressive easing by the US Federal Reserve (Fed) did not materialise as the central bank has only cut its federal funds rate by a total of 50 basis points this year to the 1.75% to 2.00% range. It said the Fed's interest rate decision has supported the strength of the US dollar.

"In addition, the US Fed did not guide that there will be quantitative easing despite intervention in the repo market. We also expect the ringgit to be weighed down by ongoing trade uncertainty, especially if trade tensions escalate.

"So far, the Chinese yuan has depreciated by 3.3% YTD and this may also contribute to the softer ringgit. Although Malaysia was retained in the FTSE Russell's World Government Bond Index, its position remains in the watch list, which reflects some lingering uncertainty about Malaysia's position in the upcoming interim review in March 2020," Affin Hwang said.

At 10:35am today, the ringgit strengthened to 4.1868 against the US dollar.

The exchange rate so far today was between 4.1840 and 4.1880.