The ringgit is expected to trade aggressively in the range of 4.39-4.41 next week
BERNAMA
April 1, 2023 10:53 MYT
The ringgit is expected to trade aggressively in the range of 4.39-4.41 next week
The ringgit is expected to trade on a more aggressive trend next week but below RM4.40 in a range of 4.3925 to 4.4175 against the US dollar, an analyst said. -Decoration photo/Reuters
KUALA LUMPUR: The ringgit is expected to trade on a more aggressive trend next week but below RM4.40 in the range of 4.3925 to 4.4175 against the US dollar, said an analyst.
SPI Asset Management managing partner Stephen Innes said as the market began to move on from the United States (US) banking crisis, Asian currencies should perform particularly well, with signs that the US Federal Reserve (Fed) will cut its interest rates towards the end of the year.
Asian foreign exchange (FX) remains dependent on China's growth and has provided a buffer during the recent meltdown of the western banking system.
China's robust growth continues to provide a boost to Malaysia's export-oriented economy.
"However, the lower level of yield compared to other emerging market (EM) currencies makes it less attractive compared to other higher risks unless China's growth begins to pick up robustly," Innes told Bernama.
Meanwhile, Bank Muamalat Malaysia Bhd's Chief Economist and Social Finance Dr Mohd Afzanizam Abdul Rashid said the ringgit rose relatively high against the US dollar following the Fed's lackluster guidance which weakened the value of the US dollar.
In the second quarter of 2023, he expects the FX environment to remain volatile in anticipation of the Federal Open Market Committee (FOMC) meeting scheduled for May or June, which will provide an indication if the Fed will delay its rate hike.
"In addition, the market also wants to see if the banking crisis is really over. The second quarter of 2023 will see a very volatile trading environment," said Afzanizam.
Meanwhile, MIDF Research in a note yesterday said the rising trend in the ringgit may continue at a stronger average of RM4.20 and by the end of the year at around RM4.00 against the US dollar, supported by the buoyant domestic economy.
The ringgit is in a good position to remain healthy as the domestic economic momentum remains positive and as Malaysia is a net commodity exporter of crude petroleum, liquefied natural gas and palm oil, it will benefit from rising global commodity prices in addition to the ongoing trade surplus.
On a weekly basis, the ringgit traded higher against the US dollar at 4.4130/4175 from 4.4250/4305 recorded a week earlier.
Meanwhile, the ringgit traded mostly lower against a group of major currencies.
It was weak against the British pound at 5.4580/4636 from 5.4034/4101 and fell against the euro to 4.8036/8084 from 4.7476/7535, but it rose against the Japanese yen to 3.3083/3122 from 3.4099/4144.
Meanwhile, the ringgit traded mixed compared to other Asean currencies.
The local note eased against the Singapore dollar to 3.3185/3224 from 3.3178/3225 the previous week and eased against the Indonesian rupiah to 294.20/294.70 from 291.90/292.50.
It rose against the Thai baht to 12.9031/9220 from 12.9610/9835 and firmed against the Philippine peso to 8.12/8.13 from 8.15/8.16 previously.