Ringgit to trade firmer against US dollar next week
KUALA LUMPUR: The ringgit is likely to trade firmer against the US dollar next week on an improved Malaysian economy, dealers said.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the ringgit was expected to strengthen with the retracement of the US dollar and the recovery of the commodities.
"With the improved commodity prices, weaker dollar, as well as better projection of Malaysian economic growth, the ringgit, which has been stable over the last three weeks, should now test the RM4.30/US dollar threshold.
"Any further weakness, especially if the ringgit trend towards the RM4.50/US dollar psychological barrier, as part of its commitment, Bank Negara Malaysia (BNM) will likely step in to defend the currency against exchange rate volatility via open market operations," he said.
The fact that the Malaysian inflation (CPI February 2017, 4.5%) remained at an eight-year high (since November 2008) was also likely to lead towards hawkish BNM policy and contribute towards higher ringgit, he told Bernama.
Meanwhile, Hong Leong Research said, the ringgit has advanced 0.2% week-on-week to 4.4295 against the greenback and climbed against the currencies of six of the Group of 10 countries.
On technical outlook, it said, the US dollar appeared to be improving but only very gradually and remained prone to declines.
"Unless the US dollar closes below 4.4230, the immediate direction will likely be up and would target 4.4376–4.4414. Upside break of 4.4427 accelerates the bulls," it added.
For the week just-edded, the ringgit moved between 4.4230 and 4.4270 against the US dollar.
On a Friday-to-Friday basis, the ringgit was traded higher at 4.4230/4280 against the greenback at 4.4340/4370.
Against other major currencies, the local note finished mostly lower except the Singapore dollar.
It weakened against the yen to 3.9789/9845 from 3.9156/9196 last Friday; declined against the euro at 4.7777/7849 from 4.7767/7818; and, against the British pound, it slipped to 5.5248/5328 from 5.4933/4983.
The ringgit improved against the Singapore dollar to 3.1600/1651 from 3.1638/1682 last week. — Bernama