“(In the) long-term, we are pretty confident the dollar will weaken. From that perspective, the pressure on the ringgit should ease quite significantly, and maybe over in the shorter term as well,” said Standard Chartered global chief investment officer Steve Brice.
Brice, however, remarked that the dollar’s weakening against the local currency could have already started.
“We may have started to see the dollar’s weakness last night, (when the) US Dollar Index broke below the 101 level,” Brice said at Standard Chartered Malaysia’s global market outlook briefing today.
The US Dollar Index declined to 100.54 yesterday, its lowest level since April.
“Potentially that is a very significant event for the US dollar. It could have started within the past 24 hours,” he said.
He added that the decline of the US Dollar Index could be a “material event against the backdrop of lower inflation in the US”.
Year to date, the ringgit has dropped 4.5%, making it the worst performing currency among Asian emerging economies during the period.
On June 27, Bank Negara Malaysia assistant governor Adnan Zaylani announced that the central bank will intervene in the foreign exchange market to stem currency movements that are deemed excessive, in an apparent bid to stabilise the ringgit.
At today’s event, Standard Chartered also unveiled their Signature CIO Funds, which it said offer retail investors the opportunity to invest in a portfolio with a more balanced strategy amid rising global uncertainties.
The group’s Global Market Outlook report predicted that financial markets in the second half of 2023 will be highly challenging to investors due to two possible “narratives”.
“Firstly, the report shows a ‘no-landing’ scenario which argues for chasing equities higher as the US avoids a recession altogether.
“Secondly, a scenario where risky assets are not worth holding at all as a deep recession awaits,” the group said in today’s statement.
The Signature CIO Funds were developed by the group’s chief investment office, led by its CIO Steve Brice, in partnership with European asset management firm Amundi.
It consists of four different funds, which are catered to different consumers according to their respective risk profiles and investment objectives.
“The Signature CIO Funds will help investors make well-informed decisions against the constantly evolving economic landscape,” said Brice.
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