Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 5): Analysts are expecting the ringgit's performance to remain weak in light of heightened trade tensions between the US and China after President Donald Trump threatened to impose more tariffs on Friday.

News of Trump's Friday tweet that the US will impose 10% tariffs on another US$300 billion of Chinese imports starting Sept 1 saw the US dollar strengthen by 1.35% against the Chinese renminbi (yuan).

Meanwhile, the ringgit depreciated to 4.1757 after hovering between 4.1565 and 4.1780 against the greenback today.

The Sino-US tensions, which have been going on over the past year, have added strength to the US dollar, appreciating some 2.3% against the ringgit.

Across other currencies, the ringgit has also fallen against the Singapore dollar at 3.0197. However, it strengthened to 0.5935 against the yuan.

In a research note today, Hong Leong Investment Bank (HLIB) said the ringgit is expected to remain weak ahead.

HLIB revised its 2019 average ringgit assumption versus the US dollar from 4.05-4.15 to 4.15-4.20.

"This comes on back of (i) heightened risk aversion with US-China trade tensions potentially evolving into a full blown trade war, (ii) possibility of yuan depreciating and (iii) revision in our OPR expectations from unchanged to 25bps cut," it said.

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