KUALA LUMPUR, Aug 26 — The ringgit is expected to trade firmer against the US dollar at 4.2500 to 4.2700 level next week on strong demand for the local note, backed by rising commodity prices and a weaker US dollar.
Affin Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said with country’s positive economic data and higher consumer confidence level announced recently, the ringgit’s upward momentum this week would likely spill over to next week as investors sentiment towards the local unit had improved.
“Foreign funds inflows into the country are also likely to be expected ahead of the general election which is yet to be announced.
“With the economy growing at 5.8 per cent in the second quarter (Q2) this year, it shows that Malaysia is experiencing a strong growth in the general macro-economic condition.
“With continuous good governance, we expect the local currency to appreciate to 4.25 next week,” Nazri Khan told Bernama.
On Aug 18, Bank Negara Malaysia said Malaysia’s economy remained on an upward momentum since Q2 2016, with a gross domestic product (GDP) growth of 5.8 per cent in Q2 2017 compared with 4.0 per cent in the same quarter last year.
For the six-month period, the economy expanded by 5.7 per cent.
On the external front, OANDA’s Senior Market Analyst, Jeffrey Halley, said the ringgit was expected to trade higher along with other emerging markets towards the 4.2700 level against the US dollar.
“Barring any hawkish surprises from the US Federal Reserve Chair Janet Yellen at the annual Jackson Hole Economic Policy Symposium in the United States, we expect the greenback’s weaknesses to linger into next week,” said Halley.
On a Friday-to-Friday basis, the ringgit was traded higher at 4.2710/2740 against the US dollar from 4.2880/2910 in the previous week.
The local note closed highest for the week along with other emerging market currencies.
Meanwhile, the ringgit was traded higher against other major currencies.
It improved versus the Singapore dollar to 3.1397/1426 from 3.1423/1457, rose against the British pound to 5.4801/4844 from 5.5247/5302, depreciated against the euro to 5.0411/0455 from 5.0311/0363, and increased against the yen to 3.8980/8011 from 3.9285/9324 last Friday. — Bernama
Source: The Malay Mail Online