Ringgit expected to trade cautiously next week

Jun 17, 2017

The ringgit is expected to trade cautiously next week as the US dollar strengthens after the US Federal Reserve (Fed) raised interest rate and an upbeat economic data on its employment rate, dealers said.

The Fed increased the benchmark interest rate by 0.25% to 1.25%.

Senior Trader at OANDA, Stephen Innes, said investors were, however, unconvinced that the US economy would hit the Fed’s inflation target.

“Due to this, I expect traders to re-engage the US dollar shorts, next week.

“As for the ringgit, I would expect it to remain a favoured long for investors as weaker ringgit will help the manufacturing sector particularly the electronic industry,” he told Bernama.

Mercury Securities Sdn Bhd Research Head, Edmund Tham, said investors would likely monitor Malaysia’s international reserves and the inflation rate which is due to release next week to determine their next move on ringgit.

For the week just-ended, the ringgit moved between 4.2520 and 4.2770 against the US dollar.

On a Friday-to-Friday basis, the ringgit was traded lower at 4.2740/2790 against the greenback from 4.2635/2665 last week.

The local note ended mostly lower against other major currencies for the week.

It fell against the Singapore dollar to 3.0893/0933 from 3.0795/0827 last Friday but improved versus the yen to 3.8394/8442 from 3.8615/8653 previously.

The ringgit depreciated against the British pound to 5.4549/4617 from 5.4291/4351 and weakened against the euro to 4.7741/7801 from 4.7628/7674 last Friday.

The market was closed on Monday for Nuzul Al-Quran public holiday.  –Bernama

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