Ringgit likely to strengthen in tight-range trading next week
KUALA LUMPUR, Aug 12 — The ringgit is expected to strengthen slightly but move in a tight range of between 4.2800 and 4.2900 against the US dollar next week on mixed market sentiments, a dealer said.
MIDF Amanah Investment Bank Bhd’s Chief Economist, Dr Kamaruddin Mohd Nor said the local currency was expected to find support from positive sentiment in the local market brought about by the release of Malaysia’s second-quarter (Q2) gross domestic product (GDP) and 1Malaysia Development Bhd (1MDB) news.
“Malaysia’s Q2 GDP to be announced yesterday next week is expected to show another good performance based on Malaysia’s economic data released thus far.
“1MDB’s payment of its debt to Abu Dhabi’s International Petroleum Investment Company PJSC from proceeds of the ongoing rationalisation programme yesterday is also positive to the local market,” he told Bernama.
However, geopolitical tensions between the US and North Korea was expected to continue affecting Asian emerging currencies including the ringgit on the back of prevailing risk-off sentiment in the markets as investors swarmed to safe-haven assets, he added.
Meanwhile, Hong Leong Research said the ringgit slipped 0.3 per cent week-on-week against a firmer US dollar but managed to beat eight of the Group of 10 countries that were on the retreat amid risk aversion.
“We maintain a slight bearish view on the ringgit next week against the greenback, possibly weighed down by unabating geopolitical concerns as well as risk aversion ahead of Malaysia’s GDP report.
“Apart from these, we expect the ringgit direction to be dictated by the US dollar performance,” it added.
On a Friday-to-Friday basis, the ringgit was traded lower at 4.2935/2965 against the US dollar from 4.2770/2800 in the previous week.
The local note was traded higher against other major currencies, except the Japanese yen.
It improved versus the Singapore dollar to 3.1461/1495 from 3.1534/1570 last week, rose against the British pound to 5.5644/5696 from 5.6264/6312 and appreciated against the euro to 5.0479/0518 from 5.0811/0864 previously.
The local note weakened against the yen to 3.9365/9396 from 3.8857/8895 last Friday. — Bernama
Source: The Malay Mail Online