Market jitters to set tone for ringgit next week, with RM4.24-RM2.46 range expected
This follows the anticipation of a potential meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping, as well as the upcoming Federal Open Market Committee (FOMC) meeting by the end of the month.
SPI Asset Management managing partner Stephen Innes said the market is expected to adopt a tone of cautious optimism next week, as the potential Trump-Xi meeting could reset the US-China dialogue, lifting broader Asian sentiment.
"For Malaysia, any thaw in trade tensions could brighten the macro outlook and, by extension, offer a floor to the ringgit in the near term. That diplomatic backdrop, however tentative, has helped curb more aggressive ringgit selling into the weekend," he told Bernama.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that the next FOMC meeting will be held on July 29 and 30, and therefore, market participants will be closely watching to see whether the US Federal Reserve (Fed) will cut the Fed Fund Rate.
"Next week, there are not many data points to look at other than some comments from the Fed officials; thus, the market will be adopting a wait-and-see stance," he added.
Meanwhile, Kenanga Investment Bank Bhd said the ringgit remains supported by improving domestic fundamentals, rising foreign direct investment inflows, and infrastructure catalysts such as the resumption of the Mass Rapid Transit 3 project.
"We expect US dollar-ringgit to range between RM4.23 to RM4.25 per US dollar in the near term," it said in a note today.
On a Friday-to-Friday basis, the ringgit ended the week better against the greenback, closing at 4.2410/2455 as compared with 4.2475/2525 previously.
The local note also traded higher against a basket of major currencies.
The ringgit appreciated vis-à-vis the Japanese yen to 2.8517/8549 from 2.8893/8929, and strengthened against the British pound to 5.6999/7060 from 5.7524/7592 last Friday.
It also rose versus the euro to 4.9336/9388 from 4.9679/9737 at the end of last week.
Against Asean currencies, the ringgit traded mostly higher.
The local note firmed against the Singapore dollar to 3.3027/3065 from 3.3186/3228, strengthened versus the Indonesian rupiah to 260.2/260.6 from 261.8/262.3 previously, and improved against the Philippine peso to 7.41/7.43 from 7.52/7.53 last Friday.
However, it weakened versus the Thai baht to 13.3027/3065 from 13.0668/0886.
-- BERNAMA
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Tasco likely to post stronger earnings on its new warehouse
MBSB Research said it has kept its earnings projections unchanged. PETALING JAYA: Stronger quarters are envisaged for Tasco Bhd , given improved contributions from its new warehouse and substantial tax savings recognition once investments under the integrated logistics services tax incentives are approved, says MBSB Research. The logistics group posted a net profit of RM19.9mil for the first quarter of financial year 2026 (1Q26), up 30.68% year-on-year, thanks to stronger earnings contribution from its international business solutions (IBS) segment. MBSB Research, formerly MIDF Research, said Tasco's 1Q26 results had met its expectations, with margin recovery starting to take shape. 'We have kept our earnings projections unchanged. 'We anticipate further improvement in the contract logistics segment this financial year, driven by recent additions to its customer base.' Notably, the logistics-based group is largely shielded from tariff-related risks, with the US-bound volumes accounting for less than 5% of its total revenue. The research house had maintained a 'buy' call on the stock with an unchanged target price of 68 sen. Meanwhile, RHB Research, in a note to clients, said better performance in the group's IBS segment was dragged by weaker domestic business solutions (DBS) segment in 1Q26. It noted 1Q26 core profit was also missed on a weaker DBS segment due to slower volume and higher costs. However, the research house said it remained optimistic for stronger quarters ahead on improved contributions from the new warehouse and substantial tax savings. For now, RHB Research had made no changes to its forecasts on Tasco, pending the group's upcoming analysts briefing. 'At this juncture, we remain upbeat for the upcoming quarters of financial year 2026 (FY26), driven by volume recovery, stronger contributions from new warehouses, and higher tax savings,' the research house noted. RHB Research has kept a 'buy' call on the stock with a target price of 86 sen.
The Star
an hour ago
- The Star
How the US became the apex predator on trade
For a region often hailed as the future of the global economy, it's been an unedifying experience. One by one, Asian leaders swallowed trade accords with the United States that are slightly better than envisaged months ago, but more punitive than when they bet on access to the American market as a development strategy decades ago. The glory days of supply chains must seem like a prehistoric time to the countries that lined up to concede to White House demands for levies. Certainly a throw-back to an earlier, less prosperous, age: The overall level of US tariffs is now the highest since 1930s, according to Bloomberg Economics. Japanese Prime Minister Shigeru Ishiba was once adamant he would never accept duties, especially on autos, but concluded he could live with a 15% penalty. The European Union's top official, Ursula von der Leyen, said last Sunday the 15% rate the bloc settled on with President Donald Trump was the best she could manage. Key economies yet to strike a deal, such as South Korea and India, risk more adverse terms than those that already went along to get along. Trump is demanding a demonstration of obeisance and, in important ways, is receiving it. At the top of the commercial food chain is the United States, still the premier economy by a healthy margin. Tariffs may not revive the working-class communities that he claims to champion, but Trump can put on an emotionally satisfying show. Fingers crossed And the nations that have yielded get Trump off their back – and cross their fingers that they will fare better under the next president. In this sense, it's useful to think in terms of apex predators, those at the pinnacle of the natural food chain that are able to devour smaller players, according to Dmitry Grozoubinski, a former Australian trade negotiator. 'They are to a large extent paying protection money,' he told me. Tariffs of around 20% seem to be the benchmark for South-East Asia, based on deals announced with the Philippines, Indonesia and Vietnam. In the case of the latter two, they negotiated the US down from higher levels than foreshadowed in April. They will still hurt. Vietnam, which has become an export dynamo, may see its shipments to America drop by one third. Efforts to squeeze China are a feature of the pacts; Washington wants to curb the ability of Chinese firms to re-route products through third countries. The Philippines appeared to suffer a humiliation; the levy on goods from the archipelago was just a hair lower than what was announced by Trump a few weeks ago. Many details are still to be resolved and countries haven't given up on getting better terms. The common element, aside from just getting what passes as a deal done, is allowing Trump some of the theatre he craves. Praise the agreements and the White House's occupant. Counting on ties And, perhaps, when the attention is elsewhere, you can get a slightly better deal. Philippines President Ferdinand Marcos Jr made it clear he hasn't given up. Ahead of his recent meeting with Trump at the White House, his team put great store in the close historical ties between the two nations; the Philippines was once a US colony and it regularly brushes up against Chinese ships in the South China Sea. On the face of it, Manila got little from the arrangement. Marcos' best shot is to work with negotiators while Trump has moved on. Pentagon chief Pete Hegseth hinted at this by saying there may be a military component to the accord. 'The wolf is now at other doors,' said Grozoubinski, author of the book Why Politicians Lie About Trade. 'The indignity hurts less than the fight would. In return, counterparts get a semblance of certainty about the cost of entry to the United States, a vital component in the competition for foreign direct investment,' Grozoubinski added. The escape can be a form of victory. In the case of Vietnam, for example, the country is still fairly competitive with a 20% tariff. It stings, but probably isn't enough to warrant a producer packing up and going somewhere else. It may all be worth it to keep access to US customers. The administration foreshadowed this calculous before 'Liberation Day'. Stephen Miran, chair of Trump's Council of Economic Advisers, told Bloomberg Television in March that nations have little choice other than to sell to the United States. They will pay up to retain that privilege. Seoul, you are next. South Korean officials have dangled a shipbuilding partnership as part of a potential compact. Talks with China, underway in Sweden, will be something else. Hopefully, the world economy won't be too damaged. The question Chinese President Xi Jinping will ask is whether the fight is worth it and how much resistance his own economy can stand. — Bloomberg Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. The views expressed here are the writer's own.
The Star
2 hours ago
- The Star
Frontken expected to report solid 2Q results
HLIB Research said favourable foreign-exchange trends and sustained strong demand from its key Taiwanese clients will drive the company's growth. PETALING JAYA: Frontken Corp Bhd , a provider of support services to the semiconductor industry, is expected to record a strong financial performance in its second quarter of 2025 (2Q25) on strong tailwinds from macro factors, analysts say. Favourable foreign-exchange trends and sustained strong demand from its key Taiwanese clients will drive its growth, said Hong Leong Investment Bank Research (HLIB Research). Frontken stands to benefit from the surge in new semiconductor fabs globally, notably in the United States, Singapore and India, while the weaker ringgit against the Taiwanese dollar works in its favour, the research house said. The Taiwanese dollar appreciated against the ringgit by 4% in 2Q25 from the previous consecutive quarter. But a dilution in the company's share base is expected to cap share prices for the time being. 'While we remain positive on Frontken's growth prospects, a potential sizeable increase in share count of an additional 32% from a warrant conversion that expires in May 2026 remains an overhang that could limit upside in the near term,' the research house said. 'With Frontken's share price now above the RM4 warrant exercise price, the 510 million in-the-money warrants (32% of the current share base) could present a near-term overhang. 'Sustained re-rating beyond the current price range would require strong catalysts such as unexpected strong earnings delivery, clear expansion plans or entry into new markets to absorb incremental supply,' the research house added. HLIB Research also said Frontken is holding some US$30mil in cash that was previously intended for a potential US acquisition, which could result in up to some RM10mil in non-core, unrealised forex losses in 2Q25. The weaker ringgit bodes well for Frontken's key subsidiary, Ares Green Tech Corp, which primarily bills its customers in the Taiwanese dollar, the research house said. 'This contrasts with other listed Malaysian peers in the technology sector that are affected by the stronger ringgit due to their US dollar-based export sales,' it said. HLIB Research said although the planned US acquisition did not materialise, the country's market remains on Frontken's radar, with management currently exploring a potential joint venture or collaboration with a US-based precision cleaning company to support Taiwan Semiconductor Manufacturing Co Ltd's newly established fabs. 'In the near term, cleaning services are still handled in Taiwan via air freight, which remains cost-effective relative to the high operating costs in the United States. However, this arrangement is unlikely to be sustainable, as it runs counter to US localisation and self-sufficiency objectives.' HLIB Research left its forecasts for Frontken unchanged, maintaining its 'hold' call with an unchanged target price of RM4, based on a target price-earnings ratio of 35 times earnings for next year.
