Ringgit to Undergo Technical Correction Against the US Dollar Next Week | Money
KUALA LUMPUR, Oct 16 – The ringgit is expected to undergo a technical correction in the coming days, trading in a range of RM 4.15 to RM 4.16 against the US dollar in the shortened holiday week, analyst said .
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit, which has traded higher for six consecutive days before declining on Friday, could suffer a further correction as investors may want cash out some winnings.
âDespite this, the ringgit appears to be quite constructive given the high levels of commodity prices, namely Brent crude, liquefied natural gas and crude palm oil, which will help support Malaysia’s economic recovery.
“The tightening of the interstate travel ban has also been a boon to the country’s economy, as tourism-related industries such as aviation, hospitality, food and beverage, and entertainment are expected to benefit from pent-up demand, âhe told Bernama.
Meanwhile, Hong Leong Research said in a note that the ringgit had seen strong swings between 4.1500 and 4.1828 against the US dollar this week, before settling at a one-month high at 4.1545 at Thursday’s close, up 0.7% week-on-week. .
“Signs of further weakness in the greenback coupled with positive ringgit catalysts, such as further easing of movement controls and a high outlook for commodity prices, should help keep the local currency’s bullish trend over the course of the year. of the coming week.
âWe are therefore ‘neutral’ to ‘slightly bearish’ on the US dollar / ringgit outlook, anticipating a range of 4.14 to 4.17 for the shortened holiday week. The downward trajectory could however be limited by prudence before the tabling of the 2022 budget on October 29, âhe added.
For the week just ended, the ringgit was mostly higher against the US dollar, except on Friday due to improved sentiment on the local front and cautious investor sentiment, which weighed on the greenback following to a wealth of US economic data such as the Consumer Price Index, the Federal Index Free Market Committee Reports and unemployment claims data.
On a weekly basis, the ringgit rose 190 basis points to 4.1560 / 1590 against the greenback on Friday from 4.1750 / 1800 a week earlier.
The local unit traded for other major currencies compared to the previous Friday.
It appreciated against the euro at 4.8222 / 8257 against 4.8292 / 8350 a week earlier and appreciated against the Japanese yen at 3.6341 / 6368 against 3.7320 / 7368 previously.
However, the local rating dipped against the Singapore dollar to 3.0824 / 0849 from 3.0771 / 0810 a week earlier and fell against the British pound to 5.7049 / 7091 from 5.6880 / 6948 previously. – Bernama