Bullish sentiment for the ringgit will likely push the local currency to perform better against the US dollar next week. — Reuters pic
SPI Asset Management head of trading and market strategy Stephen Innes said the ringgit would benefit from an interest rate cut by the US Federal Reserve and perhaps would perform even better if the reduction was by 50 basis points.“But Malaysia’s economy is relatively resilient and a dovish Fed allows more room for Bank Negara Malaysia to drop interest rates later in the year, if warranted.
Similarly, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Fed was likely seen to deliver a rate cut in the second half of this year and perhaps as early as this month. Next week, BNM’s Monetary Policy Committee meeting will be held on July 9, 2019 with most economists expecting the overnight policy rate to remain unchanged at 3.00 per cent.For the week just ended, the ringgit started in a weak note as dollar sentiment improved following a positive development in the US-China trade war where both economic powerhouses’ leaders agreed to a truce coupled with interest rate cut prospect by the Fed.
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