Ringgit likely to strengthen next week on softer greenback

KUALA LUMPUR: The ringgit is expected to strengthen against the US dollar next week on the back of a softer greenback and oil price recovery, a dealer said.

Hong Leong Research said the ringgit weakened 0.56% week-on-week to 4.0168 against the US dollar on softer oil prices but narrowed its sharp losses from mid-week.

It said the local note advanced against eight of the G10 countries, mostly European and commodity majors.

"We are slightly bullish on the ringgit against the US dollar as we anticipate a continuing slight recovery in oil prices and a softer greenback ahead of first-tier US data.

"Gains are likely moderate as markets remain risk-off leading into the US data release," it said.

Meanwhile, Affin Hwang Investment Bank Vice-President/Retail Research Head Datuk Dr Nazri Khan Adam Khan said the US Federal Reserve chair Janet Yellen was expected to give hints tonight that will not support an increase in interest rate in the next monetary policy meeting.

"The investors' focus will again shift to other regions including Asia in the hunts for higher yielding assets.

"Foreign fund inflow could help lift the ringgit higher next week, especially the interest in investment in Malaysian sovereign debt that is currently at all-time high, with current foreign holdings at 51%," he said.

On a Friday-to-Friday basis, the local note fell against the greenback to 4.0130/0200 from 4.0105/0165 previously.

Against other currencies, the ringgit ended mostly higher except the British pound.

The ringgit increased against the Singapore dollar to 2.9669/9729 from 2.9776/9834 last Friday, appreciated against the yen to 3.9942/1024 from 4.0017/0093 and gained against the euro to 4.5299/5414 from 4.5375/5455 previously.

It weakened against the British pound to 5.2956/3056 from last Friday's 5.2698/2793. — Bernama