Ringgit to see range-bound trading against US dollar next week

, Sept 30 — The ringgit is expected to trade in a narrow range with a downward bias of between 4.19 and 4.22 against the next week as the greenback continues to strengthen, a dealer said.

MIDF Amanah Investment Bank Bhd’s Chief Economist, Dr Kamaruddin Mohd Nor, said the recent rise of the ringgit was mainly due to the weakness in the US dollar.

“Ringgit has been traded mostly on a downside bias this week, mainly contributed by fund outflow from the equity market while the US dollar was on the rebound trend,” he told Bernama.

The US dollar was moving on the upside bias with the dollar index currently standing at 93.07, after consolidating for nearly a month, following the Federal Reserve (Fed) Chair, Janet Yellen’s hawkish commentary on Tuesday, signalling the possibility of a third rate hike in December which switched sentiment towards the dollar, he said.

The Fed’s pledge recently to begin reducing its US$4.5 trillion balance sheet in October also showed that the US economy was strong enough for the to make the move, he said.

Portfolio re-balancing towards developed had put further pressure on the ringgit, as well as, other emerging currencies, and this move was expected to continue next week, he added.

Meanwhile, Hong Leong Research said the ringgit slipped 0.8 per cent week-on-week against a rebounding US dollar but managed to advance against the currencies of eight of the Group of 10 countries that also retreated against the greenback.

“We expect the US dollar to hold firm next week, thus the ringgit is likely to sustain a softer tone. Upside surprises in data flow will limit losses, but may not challenge the impact of better-than-expected US data,” it said.

On a Friday-to-Thursday basis, the ringgit was traded lower at 4.2190/2220 against the greenback from 4.1960/1000 last week.

It depreciated against the dollar to 3.1063/1097 from 3.1052/1090 on Friday and slipped versus the yen to 3.7499/7532 from 3.7308/7353.

Against the euro, the ringgit was slightly higher at 4.9788/9828 from 4.9987/9039 and vis-a-vis the pound, it appreciated to 5.6425/6482 from 5.6617/6679.  — Bernama

Source: The Malay Mail Online

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