KUALA LUMPUR – The ringgit is expected to trade higher against the US dollar next week on positive Covid-19 vaccine sentiment and better performance in crude oil prices, said an analyst.
Axi chief global market strategist Stephen Innes said as commodities are expected to fly out of the New Year gate, particularly for the higher oil prices, they provide a double whammy of support for the local unit.
“The ringgit has been an underdog most of the year, but its strong beta-to-commodity markets are now making it a leader of the pack.
“And, it suggests that the ringgit could be poised to test the key psychological 4.0 level against the US dollar, possibly as soon as next week,” he told Bernama.
Throughout this week, the ringgit continued to make inroads against the greenback, marking 10 consecutive weekly gains versus the dollar even as the local note marched upwards in tandem with rising oil prices.
The heightened risk appetite also served as tailwinds for Asian currencies, with many reaching multi-year highs in recent weeks.
The local market was closed yesterday for the New Year holiday, and will resume trading on Monday.
On a Thursday-to-Thursday basis, the ringgit was 390 basis points higher against the US dollar at 4.0200/0250 versus 4.0590/0620 in the previous week.
The local note also traded firmer against other major currencies, except for the Singapore dollar.
It appreciated against the Japanese yen to 3.9018/9078 from 3.9153/9193, improved versus the British pound to 5.4905/4977 from 5.5186/5243, and gained against the euro to 4.9358/9427 from 4.9479/9528.
However, it depreciated against the Singapore dollar to 3.0395/0444 from 3.0537/0571 previously. – Bernama, January 2, 2021
