Ringgit could breach 4.30 to US dollar next week if crude slides further

Bernama
December 12, 2015 11:54 MYT
The US Federal Open Market Committee meeting next week may cause the ringgit to experience cautious trading next week. - File pic
Concerns over sustained global oil glut may push prices to continue their down trend next week, and this should put some stress on the ringgit to breach the 4.30 per dollar level again, a currency trader said.
"Concerns over the crude oil oversupply remains. Another fall in crude oil prices will prompt selling in emerging currencies of economies linked to crude exports, including the ringgit.
"Softer crude, coupled with the US interest rate hike drawing closer, would easily push the ringgit back to the weaker spot above 4.30 per US dollar next week," he told Bernama.
As of Friday, the global benchmark West Texas Intermediate crude shed 1.1 per cent to US$36.76 a barrel, its lowest settlement since 2009, while the internationally traded Brent was still hovering near its seven-year low of US$39.64 a barrel.
The US Federal Open Market Committee meeting to finalise a rate hike is scheduled for Dec 15-16 and the ringgit is likely to experience cautious trading next week as the greenback may gain strength from the rate hike.
"Although the hike is already priced in, investors seem to feel safer holding on to the greenback in case the US Federal Reserve signals that it may hike (the interest rate) aggressively after next week's meeting," added another dealer.
For the week just-ended, the ringgit declined 685 pips against the US dollar to 4.2900/2950 from last Friday's 4.2215/2265.
The local unit weakened against the Singapore dollar to 3.0484/0543 from 3.0197/0254 last Friday, fell against the yen to 3.5199/5251 from 3.4369/4421 last week and depreciated against the British pound to 6.5049/5142 from 6.3762/3858 previously.
It also declined against the euro to 4.7048/7112 from 4.5879/4951 previously.
#British pound #crude oil #dollar #fuel #greenback #ringgit
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