KUALA LUMPUR – The ringgit is expected to experience some technical correction in the coming days, trading in the range of 4.15 to 4.16 against the US dollar during the holiday-shortened week, an analyst said.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local note, which traded higher for six straight days before retreating yesterday, could see further correction as investors may want to cash in some gains.
“Despite that, the ringgit appears to be fairly constructive in view of the elevated levels of commodity prices, namely Brent crude, liquefied natural gas and crude palm oil, which will help underpin Malaysia’s economic recovery.
“The uplift of inter-state travel ban has also been a boon to the country’s economy as tourism-related industries such as aviation, hotel, food and beverages, and entertainment stand to benefit from the pent-up demand,” he told Bernama.
Meanwhile, Hong Leong Research said in a note that the ringgit saw big swings between 4.1500 and 4.1828 against the US dollar this week, before settling at a one-month high of 4.1545 at Thursday’s close, up 0.7% week-on-week.
“Signs of renewed weaknesses in the greenback coupled with ringgit-positive catalysts, such as further easing of movement controls and elevated commodity price outlook, are expected to help sustain bullishness in the local currency in the week ahead.
“We are, therefore, ‘neutral’ to ‘slightly bearish’ on the US dollar/ringgit outlook, expecting a range of 4.14 to 4.17 for the holiday-shortened week.
“The downward trajectory could, however, be capped by cautiousness ahead of the tabling of the 2022 Budget on October 29,” it added.
For the week just ended, the ringgit was mostly higher versus the US dollar except yesterday on improved sentiment on the local front and cautious investor sentiment, which weighed on the greenback following a slew of US economic data such as the Consumer Price Index, Federal Open Market Committee minutes and jobless claims data.
On a weekly basis, the ringgit rose 190 basis points to 4.1560/1590 versus the greenback yesterday from 4.1750/1800 a week earlier.
The local unit was traded mixed against other major currencies compared to the previous Friday.
It appreciated against the euro to 4.8222/8257 from 4.8292/8350 a week earlier and rose versus the Japanese yen at 3.6341/6368 compared to 3.7320/7368 previously.
However, the local note dipped against the Singapore dollar to 3.0824/0849 from 3.0771/0810 a week before and fell vis-a-vis the British pound to 5.7049/7091 from 5.6880/6948 previously. – Bernama, October 16, 2021
