KUALA LUMPUR — The ringgit is likely to continue its uptrend against the US dollar next week, re-trying the psychologically-important 4.00 level next week, said an analyst.
FXTM market analyst Han Tan said the ringgit would continue its upward trajectory provided that the risk-on sentiment remained intact.
“However, should the dollar extend its rebound or if domestic political risks are ramped up, then the US dollar versus ringgit (USD/MYR) pair may mark a return to the 4.05 resistance level once more,” he told Bernama.
For the week ahead, he noted that markets will be relying on the Federal Reserve officials for any potential clues as to when they might ease back on their asset purchasing programme.
“Such cues may prompt gyrations across broad asset classes, including the dollar and the wider foreign exchange universe. Developments surrounding the global pandemic may also continue having a major say in the global financial markets, especially if things take a significant turn for the worse,” he added.
For the week just ended, Hong Leong Bank Bhd in a research note said the ringgit was traded as high as 3.9957 versus the US dollar during the first trading day of the year, but the pair had since trended down steadily, amid bullish US dollar sentiments.
“However, we believe this could be short-lived as the US dollar weakness resumes. We are looking at a likely range of 3.98-4.04 in the week ahead,” it added.
On a Friday-to-Thursday basis, the ringgit was lower against the US dollar at 4.0300/0340 versus 4.0200/0250 in the previous week.
The local currency was traded firmer against other major currencies except for the Singapore dollar.
It appreciated against the Japanese yen to 3.8813/8863 from 3.9018/9078, improved versus the British pound to 5.4804/4875 from 5.4905/4977, and gained against the euro to 4.9319/9384 from 4.9358/9427 on Thursday last week.
The ringgit, however, depreciated against the Singapore dollar to 3.0420/0459 from 3.0395/0444 previously. – Bernama, January 9, 2021
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