Ringgit likely to stay weaker next week amid US-China trade deal optimism

THE ringgit is expected to stay weaker in the near term, given the optimism that a trade deal between the United States (US) and China, and perhaps the rest of the world, would be achieved within the 90-day pause period.

Bernama cited Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid saying the US-China talks by the end of the week may have spurred interest in the greenback.

“China’s trade data during April showed that exports to the US declined 21 per cent, while China’s export growth to ASEAN and the European Union accelerated by 22.5 per cent and 8.3 per cent, respectively.

“It seems that such a trend would continue if the tariff issues are not resolved,” he told Bernama.

Mohd Afzanizam said next week will focus on the US consumer price index for April 2025, scheduled for release on May 13, 2025, along with retail sales data for April 2025, due May 15, 2025.

Additionally, he said the market will also closely monitor Malaysia’s first quarter of 2025 (1Q 2025) gross domestic product (GDP) data, set to be released on May 16, 2025.

“I am looking at 4.5 per cent for Malaysia’s 1Q 2025 GDP, and I suppose the 1Q 2025 GDP is still going to be decent, with front-loading activities on international activities providing support, albeit momentarily.

“The second half of 2025 would be crucial as this will depend on the outcome of the trade negotiations,” he said.

Therefore, Mohd Afzanizam expects the ringgit to trade within a range of 4.30 to 4.33 next week.

The ringgit ended the week weaker against the US dollar, closing at 4.2970/3005, from 4.2560/2600 the preceding week.

The local note traded lower against a basket of major currencies.

The ringgit fell against the euro to 4.8320/8359 from 4.8297/8342 last week, weakened vis-a-vis the Japanese yen to 2.9565/9591 from 2.9437/9467, and depreciated against the British pound to 5.7004/7050 from 5.6639/6692.

The ringgit also traded lower against ASEAN currencies.

It edged down against the Indonesian rupiah to 260.0/260.4 from 258.8/259.3, slid against the Singapore dollar to 3.3095/3124 from 3.2862/2898, declined versus the Thai baht to 13.0082/0267 from 12.8697/8903, and slipped against the Philippine peso at 7.74/7.76 from 7.65/7.67 the previous Friday. - May 10, 2025