Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the current resistance level of the ringgit was at 4.11 versus the greenback, whereby the next resistance level was at about 4.15.
“I suppose the ringgit would linger around the current resistance level of 4.11, as news on the ECRL should provide some impetus to the currency,“ he told Bernama.
The Prime Minister’s Office announced on Friday that the ECRL project would resume at a reduced cost of RM44 billion compared with RM65.5 billion previously, following the signing of a supplementary agreement between Malaysia Rail Link Sdn Bhd and China Communications Construction Company Ltd.
Meanwhile, FXTM research analyst Lukman Otunuga pointed out that further weakness for the ringgit-US dollar pair would see the local note re-test its year-to-date high of 4.14, as the level of 4.10 became the new support level.
He said with no major economic data releases in the week ahead, the spotlight would be mainly on external factors, particularly from the United States and China, that could drive the ringgit’s performance.
“US dollar bulls could be inspired by the country’s economic indicators released next week that surprise on the upside, which in turn may weigh negatively on Asian currencies.
“However, any data releases that appear to lower the bar on a US Federal Reserve’s interest rate cut, coupled with more dovish tones detected from Fed officials’ scheduled speeches next week, could result in a weaker greenback that alleviates pressure on riskier assets,“ he said.
On the impact from China, Otunuga said the country would announce its first quarter gross domestic product data, as well as last month’s industrial production and retail sales data, next week.
“Further signs of stabilisation in the world’s second largest economy could alleviate concerns surrounding global growth, and encourage more risk-on appetite among investors,“ he added.
For the week just ended, the ringgit traded mostly lower against the US dollar, and it hit a 10-week low of 4.1120/1160 versus the greenback on Thursday, mainly due to the disappointing data on February 2019 Industrial Production Index, which grew only 1.7%-on-year, as well as the downward revision of the global growth forecast by the International Monetary Fund.
On a Friday-to-Friday basis, the ringgit fell to 4.1120/1170 against the US dollar from 4.0870/0900 previously.
The ringgit also traded easier against other major currencies last week.
It retreated against the Singapore dollar to 3.0367/0406 from 3.0182/0207 previously, depreciated against the euro to 4.6519/6596 from 4.5889/5927 and decreased against the pound to 5.3760/3842 from 5.3458/3509.
Vis-a-vis the yen, the local note also weakened to 3.6744/6798 from 3.6583/6613. — Bernama
Source: The Sun Daily