KUALA LUMPUR – The ringgit is likely to trade lower against the US dollar next week at between 4.06 and 4.08 on expectations of higher United States’ (US) bond yields that would stymie ringgit-related bond flows, said an analyst.
Axi chief global market strategist Stephen Innes said, however, that higher oil prices would continue to be a positive offsetting factor and would mitigate losses in the ringgit relative to regional peers.
“The US growth data is starting to pick up and the market will want to remain long on US dollars. Strong US economic data means higher US yields, which could be the big driver for US dollar inflows to the ringgit's chagrin,” he told Bernama.
The ringgit was traded mostly lower during the holiday-shortened week on lack of positive catalysts. The market was closed on Monday in conjunction with the Federal Territory Day.
On a Friday-to-Friday basis, the ringgit was sharply lower against the US dollar at 4.0680/0730 versus 4.0400/0450 in the previous week.
The local note also depreciated against the Singapore dollar to 3.0415/0455 from 3.0369/0416 a week earlier, and weakened against the Japanese yen to 3.8570/8621 from 3.8524/8575.
The ringgit fell vis-a-vis the British pound to 5.5687/5772 from 5.5207/5291 a week earlier but was firmer against the euro to 4.8714/8786 from 4.8945/9021 previously. – Bernama, February 6, 2021
