Ringgit Likely to Strengthen Further Next Week Amid Weakening USD
Market Outlook
The ringgit is expected to extend its gains against the US dollar next week, potentially trading between 4.41 and 4.42, said Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.
USD Index Movement
He said attention will be on the movement of the US Dollar Index (DXY), which slipped to 99.758 points on Thursday.
Impact of Trade War
“If the DXY remains subdued, there is a possibility the ringgit could appreciate further,” he told Bernama.
The ongoing United States (US)-China trade war will remain a key factor influencing market sentiment.
He noted that uncertainties over potential announcements from the US administration are leaving markets cautious, as investors struggle to assess whether the developments will have a positive or negative impact on the global economy.
FOREX Market Stabilisation
Meanwhile, SPI Asset Management managing director Stephen Innes expects the foreign exchange (forex) markets to stabilise next week, noting that the impact of the trade war is waning as it shifts from policy-driven concerns to political posturing.
Ringgit Performance
The local currency ended the week at 4.4200/4265 against the greenback, up from 4.4335/4400 the previous week. Year to date, the ringgit has strengthened by 1.09 per cent.
It slid against the Japanese yen to 3.0952/1000 from 3.0294/0340 last week, decreased vis-a-vis the euro to 5.0207/0281 from 4.8706/8778, and fell against the British pound to 5.7849/7934 from 5.7591/7676.
The local note was traded mixed against ASEAN currencies.
It appreciated against the Philippine peso to 7.75/7.77 from 7.80/7.782 and was better vis-a-vis the Indonesian rupiah to 263.1/263.6 from 266.2/266.7 last week.
However, it slid versus the Singapore dollar to 3.3495/3549 from 3.3153/3204 and declined against the Thai baht to 13.1599/1902 from 12.9589/9847.
Conclusion
In conclusion, the ringgit is expected to strengthen further next week amid weakening USD, with the DXY index remaining subdued and the trade war’s impact waning. The local currency’s performance will be influenced by market sentiment and the ongoing trade tensions.
FAQs
Q: What is the expected trading range of the ringgit against the US dollar next week?
A: The ringgit is expected to trade between 4.41 and 4.42 against the US dollar.
Q: What is the current performance of the ringgit against other major currencies?
A: The ringgit has appreciated against the Philippine peso and the Indonesian rupiah, but slid against the Japanese yen, the euro, and the British pound.
Q: What is the key factor influencing market sentiment?
A: The ongoing United States (US)-China trade war is the key factor influencing market sentiment.