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Ringgit to trade between 3.8900-3.9400 next week

KUALA LUMPUR: The ringgit is expected to trade lower in a range of between 3.8900 and 3.9400 against the US dollar next week, on concerns over the trade war between the US and China, a dealer said.

OANDA Head of Trading Asia-Pacific, Stephen Innes said the trade war would continue to dominate the market landscape and risk assets are expected to be traded weaker with regional equity markets the most impacted, while weighed down by uncertainties surrounding the US protectionism policy.

“However, since Malaysia is less dependent on US trade compared to its regional economic peers, the ringgit will be a relatively sheltered choice compared to some other regional currencies, like the Korean Won.

“Intense focus remains on China and US trade relations, which should keep local currencies including the ringgit in a defensive posture,” he told Bernama.

FXTM Global Head of Currency Strategy & Market Research, Jameel Ahmad said macro-economic data with the US Gross Domestic Product report due on Wednesday (March 28) was initially seen as the major data announcement for the week to influence market direction.

“However, the escalation in concerns over a potential US-China trade war, is now expected to remain the key focus for investors.

“Therefore, if investors do continue to sell on stock markets, it is likely to negatively influence the ringgit due to less buying demand for emerging market assets,” he added.

Meanwhile, Hong Leong Research said the ringgit advanced 0.11% week-on-week to 3.9135 against US dollar and strengthened against six of the group of 10 currencies owing to a one-day rally when the greenback tumbled.

“We maintain a bearish view on the ringgit against the US dollar next week as markets are likely to stay subdued on brewing trade war concerns and entering a busy US macro flow.

“We opine that there is little to drive renewed buying interest in the local currency in the absence of Malaysian data.

“The technical viewpoint suggests a bullish US dollar against the ringgit outlook is holding at above 3.9000 while sustaining an upward trajectory and the pair remain on track to test 3.9402,” it added.

On a Friday-to-Friday basis, the local note finished lower against the greenback at 3.9150/9200 from 3.9070/9120.

The ringgit was also traded mostly lower against a basket of major currencies, except the Singapore dollar.

It declined against the yen at 3.7318/7383 from 3.6953/6010 last Friday and depreciated against the euro to 4.8245/8318 from 4.8138/8215.

The ringgit weakened vis-a-vis the British pound to 5.5170/5248 from 5.4565/4643, but rose against the Singapore dollar to 2.9756/9799 from 2.9761/9810. — Bernama

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