malaysiangKUALA LUMPUR, The Malaysian ringgit is expected to trade in a tight range with downside bias between 4.19 and 4.20 against the US dollar next week.
The ringgit will largely be US dollar driven in the holiday-shortened week as Malaysian markets observe the Lunar New Year festive break on Feb 1 and 2, dealers said.
“At the moment, issues surrounding the US Federal Reserve have been hogging the limelight while the geopolitical tension between Russia and Ukraine in Eastern Europe could also easily sway market sentiments,” Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Bernama.
“As such the ringgit is expected to move in a tight range next week. However the upside bias for ringgit could come from crude oil prices which strengthened further following geopolitical risks,” he continued. “The Malaysian government would benefit from strong oil prices, (allowing) the smooth implemenation of expansionary fiscal policies.”
Meanwhile, Hong Leong Bank Bhd, in a research note, noted that the US dollar extended its upward climb for a second straight week against the ringgit, trading at the 4.1830 to 4.1930 levels before it went as high as 4.2065 in early Asian trading on Thursday after the hawkish FOMC decision on interest rates.
However, it observed that the ringgit has remained among the most resilient of Asian currencies, trailing behind only the Philippine peso and the Hong Kong dollar.
“The US dollar outlook against ringgit is neutral to bullish in the week ahead, amid sustained greenback strength but the upside will likely be capped by imminent consolidation in the greenback with the US dollar index (DXY) near overbought level,” it added.
For the week just ended, the ringgit ended slightly lower against the US dollar at 4.1880/1915 compared with last Friday’s 4.1840/1870.
However, the local currency traded higher against other major currencies on a Friday-to-Friday basis.
It appreciated against the Singapore dollar at 3.0860/0890 from 3.1096/1121 on the previous Friday and strengthened vis-a-vis the Japanese yen to 3.6222/6252 from 3.6715/6741.
The ringgit gained versus the euro to 4.6621/6660 from 4.7434/7468 a week earlier and rose against the British pound to 5.6031/6078 from 5.6764/6805 previously.
Source: Nam News Network
