KUALA LUMPUR – The ringgit is likely to come under pressure next week on expected continuous oil price volatility, a currency dealer said.
The market’s scepticism over the Organisation of the Petroleum Exporting Countries’s (Opec) output cut agreement and global risk aversion may continue to pressure the ringgit and most emerging Asian currencies, he said.
“The scepticism over the Opec deal may lead to further oil price swings ahead of its November meeting.
“The ringgit, which is perceived as a commodity currency, may follow suit on the volatility as many investors doubt the Opec agreement would have much impact on the crude oil market oversupply,” he told Bernama.
Opec members, with the exception of Iran, Libya and Nigeria, struck a deal at the meeting in Algeria to cut output to between 32.5 million and 33 million barrels per day (bpd) from 33.4 million bpd currently.
The details, including the quotas for each member and the implementation data, will be finalised at Opec’s policy meeting in Vienna, Austria in November.
“Beside oil factor, the ringgit and other Asian emerging currencies may continue to be under pressure on the global risk aversion as worries about Deutsche Bank soured risk sentiment, as well as uncertainties surrounding global monetary policies and the US elections,” he said.
On Friday-to-Friday basis, the local note weakened against the greenback to 4.1320/1390 from 4.1100/1170 last week.
The ringgit also ended mostly lower against a basket of currencies. It fell against the Singapore dollar to 3.0269/0325 from 3.0256/0319 last Friday and eased against the yen to 4.0862/0944 from 4.0721/0795 previously.
The ringgit declined against the euro to 4.6159/6253 from 4.6085/6168 last week and eased against the British pound to 5.3596/3704 against 5.3475/3587 last Friday.