KUALA LUMPUR, Oct 9 (NNN-Bernama) — The ringgit is expected to strengthen slightly but move in a tight range between 4.1700 and 4.1800 against the greenback next week on mixed market sentiments, an analyst said.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the elevated levels of commodity prices would help to support the ringgit next week given that the country’s economy would benefit from higher crude oil, liquefied natural gas and crude palm oil prices.
“However, the situation in China in respect to its real estate market and the geopolitical development between the United States and China in relation to Taiwan are likely to exert pressure on emerging market currencies,” he told Bernama.
Therefore, he opined that investors would be also typically seeking for protection in safe haven currencies.
Meanwhile, Kenanga Investment Bank Bhd said the ringgit may gather some momentum and appreciate against the US dollar in the near term due to the optimism surrounding the reopening of the Malaysia economy, though the US debt ceiling situation may boost some safe-haven demand.
“Furthermore, from November onwards, the direction of the local note will be mainly influenced by external factors such as the Federal Reserve’s tapering announcement, China’s economic uncertainty, US-China trade relations and global COVID-19 situation,” it said.
During the week, the ringgit was mostly higher versus the US dollar on improved sentiment on the local currency and cautious investor sentiment ahead of the release of the United States non-farm payrolls data on Friday.
On a weekly basis, the ringgit gained 20 basis points (bps) to 4.1750/1800 versus the greenback on Friday from 4.1770/1810 a week earlier.
The local unit was traded mixed against other major currencies compared to the previous Friday.
It appreciated against the euro to 4.8292/8350 from 4.8361/8408 a week earlier and performed better versus the Japanese yen at 3.7320/7368 compared to 3.7580/7616 previously.
However, the local noted dipped against the Singapore dollar to 3.0771/0810 from 3.0756/0788 a week before and fell vis-a-vis the British pound to 5.6880/6948 from 5.6373/6427.
— NNN-BERNAMA