KUALA LUMPUR, Nov 20 – The ringgit is expected to continue declining against the US dollar next week due to the lack of a local market catalyst and the strengthening of the greenback.
Hong Leong Research expects the bullish trajectory of the US dollar to continue for a week amid inflation concerns and the Federal Reserve’s rate hike expectations.
He said the pair last settled at 4.1820 on Thursday, up 0.27 percent week-on-week after trading between 4.1580 and 4.1830 in the during the last five trading days.
“We have remained neutral to bullish on the greenback starting with expectations of a still firm US dollar, with little domestic catalyst to push the ringgit forward,” he said.
Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit ended the week on a lower note, with US economic data remaining positive, suggesting that earlier accounts of rising prices. interest rates would gain momentum in the future.
He told Bernama that the increase in Covid-19 cases in Europe could also lead to the predominance of one risk mode, leading to demand for a safe haven currency, namely the US dollar.
However, he noted that the ringgit appeared to be well supported as the greenback continued to struggle to break through the immediate resistance level of RM 4.1862.
“The local rating is likely supported by the higher interest rate differential between Malaysia’s overnight key rate (OPR) of 1.75 percent and the federal funds rate of 0.25 percent as well. than reopening the economy which would increase growth prospects.
“To a large extent also, the local currency is also supported by Brent crude oil prices which have currently remained at high levels.
“As such, we expect the ringgit to continue to be between RM 4.17 and RM 4.19 next week,” he added.
On a weekly basis, the local rating was lower against the greenback at 4.1810 / 1850 versus 4.1645 / 1665 at Friday’s close.
The local unit traded for other major currencies compared to the previous Friday.
The ringgit rose against the Singapore dollar at 3.0702 / 0736 from 3.0757 / 0776 a week earlier and improved against the euro at 4.7249 / 7295 from 4.7646 / 7669 previously.
But, it depreciated against the Japanese yen to 3.6675 / 6714 from 3.6521 / 6542 a week earlier, and fell against the British pound to 5.6147 / 6200 from 5.5783 / 5810 previously. – Bernama