KUALA LUMPUR – The ringgit is likely to experience headwinds next week, trading in the range of RM4.19 to RM4.21 against the United States dollar, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
“Headwinds could appear if the Organisation of the Petroleum Exporting Countries (Opec) decides to push for more oil production, which could cause oil prices to decline and subsequently affect the ringgit,” he told Bernama.
The group is expected to hold the 20th Opec and Non-Opec Ministerial Meeting on Wednesday.
“If the meeting is held, investors will get a sense of Opec’s reaction to US President Joe Biden’s remarks on raising production faster in order to stabilise prices,” said Adam.
ActivTrades trader Dyogenes Rodrigues Diniz said the king’s acceptance of the cabinet list presented by Prime Minister Datuk Seri Ismail Sabri Yaakob is encouraging for Malaysian politics, which has been plagued by uncertainty since the resignation of Tan Sri Muhyiddin Yassin as head of the government earlier this month.
“On the downside, Malaysia hit a new high in terms of Covid-19 cases (24,599 infections on Thursday), and this is likely to be a main driver of the ringgit’s devaluation.
“From a technical point of view, the ringgit may continue to fall towards 4.1750 against the US dollar, where it is likely to find a strong level of support.”
For the week just ended, the local note was higher throughout the week as investor confidence was restored following the country’s latest political development.
Ismail Sabri yesterday unveiled his cabinet, which largely comprises those who were ministers in the administration helmed by Muhyiddin, who stepped down on August 16.
On a weekly basis, the ringgit yesterday settled at 4.1890/1930 against the greenback from 4.2380/2400 previously.
The local note traded higher against other major currencies compared with the previous week.
It appreciated against the Singapore dollar to 3.1009/1041 from 3.1070/1087, and rose against the British pound to 5.7427/7482 from 5.7709/7736.
It advanced against the euro to 4.9254/9301 from 4.9474/9498, and strengthened vis-a-vis the Japanese yen to 3.8044/8084 from 3.8654/8676. – Bernama, August 28, 2021
