There could be some strengthening of the ringgit in the coming weeks even as investors flee to safe-haven assets on “Brexit” worries.

Global financial markets continue to digest the impact of Britain’s vote to leave the European Union, as well as the implications the move would have on monetary policy and fiscal stimulus.

A technical analyst said the ringgit would likely trade higher against the US dollar and pound sterling.

“There’s a mild upside against the US dollar and stronger upside against the sterling,” he said. However, he said there would be an element of caution in the markets because of the uncertainties.

Oil prices have hovered in the US$50-a-barrel level for some weeks now, and the ringgit has hovered at around 4 to the US dollar, mirroring the crude-oil price movement.

Gold and higher-rated sovereign bonds, including US Treasuries, Japanese government bonds, bunds and the Swiss franc have been the assets of choice for investors looking for shelter from the uncertain trading landscape. Another element that underscores the challenges ahead would be the US Federal Reserve’s decision on the benchmark interest rate.

At this point, analysts believe US policymakers will not vote to raise interest rates because of the slowdown in global economic growth and the impact this will have on the US economy, where job creation has fallen since March. Analysts say a rate increase is not likely before 2018.

US data have come in quite mixed, given the improved readings on private consumption and lower inflation against the backdrop of a lower-than-expected first-quarter economic growth.

This could leave a little bit of breathing space for policymakers in Malaysia, where economic growth shows a downtrend, with weak exports and tepid growth in private consumption as well as private-sector investment.

There has been speculation that Bank Negara could cut the benchmark overnight policy rate to support growth, given that inflation, which peaked in the January-to-March period, has stabilised.

Citigroup analysts said in a report dated July 6 that the improving outlook for the developed markets “continues to offer global markets a semblance of hope despite the despondent post-Brexit outlook”.

They noted that US equity markets had put in an “impressive performance” on July 5 as sentiments rose after the better-than-expected data from the Institute of Supply Management showing an improvement in the services and manufacturing indices.

“It is worth noting that the aggregated G10 economic surprise index is already at its high for the year and within a whisker of its two-and-a-half-year high-water mark, even as the aggregated emerging-market surprise index continues to fall,” they added.

The Group of 10 are France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the United States, Canada and the 11th member, Switzerland.

“This improving economic outlook in the developed world continues to offer global markets a semblance of hope despite the despondent post-Brexit outlook. This is also supported by expectations of more monetary easing and a steadfastly dovish Fed,” the Citigroup analysts said, noting that the release of the minutes of the June Federal Open Market Committee meeting helped reinforce the view that US policymakers might have paused the rate-normalisation cycle.