KUALA LUMPUR – The ringgit is likely to continue its positive momentum against the United States dollar next week amid the continued weakness of the greenback on various developments in the market, said an analyst.
ActivTrades trader Dyogenes Rodrigues Diniz said the dollar has been falling against the ringgit due to mixed economic data from the United States.
“On the one hand, the number of initial jobless claims came in lower than expected, which is usually bullish for the US dollar, and much-weaker-than-expected pending home sales data put the greenback under pressure.
“US gross domestic product data (for the first quarter), roughly in line with expectations, failed to clear investors’ doubts on the US economic recovery.”
He said this led to a sell-off of the dollar, while investors bought more equities on the back of expectations that economic stimulus will last a while longer.
“Hence, the ringgit is expected to trade up to the 4.1000 mark against the US dollar next week.”
Another analyst said steady oil prices, with international benchmark Brent crude now above US$69 (RM285) per barrel, will also benefit the ringgit.
If the oil price rise continues to US$70 per barrel, he said, not only the ringgit, but also other currencies, will get a boost.
On the local front, a special meeting of the National Security Council (NSC) on the management of the Covid-19 pandemic has decided to implement a total lockdown on the social and economic sectors for 14 days beginning June 1.
In a statement yesterday, the Prime Minister’s Office said throughout this period, only essential economic and services sectors to be listed by NSC are allowed to operate.
It said the decision was made after taking into account Malaysia’s coronavirus situation, with the daily caseload breaching 8,000 for the first time yesterday.
On a weekly basis, the ringgit appreciated versus the US dollar to 4.1320/1350 from 4.1390/1430 a week earlier.
The local note was mostly higher against other major currencies.
It strengthened against the yen to 3.7598/7629 from 3.8074/8118 over the same period, increased versus the British pound to 5.8604/8651 from 5.8832/8897, and rose against the euro to 5.0344/0385 from 5.0595/0656.
However, it dipped against the Singapore dollar to 3.1213/1238 from 3.1099/1141. – Bernama, May 29, 2021
