KUALA LUMPUR, May 29 — The ringgit is likely to continue its positive momentum against the US dollar next week, amid the continued weakness of the greenback on the back of various developments in the market which is affecting the currency, said an analyst.
ActivTrades trader Dyogenes Rodrigues Diniz said the US dollar had been falling against the ringgit due to mixed economic data from the United States.
“On the one hand, the number of initial jobless claims came in lower than expected, which is usually bullish for the US dollar, and much-weaker-than-expected pending home sales data put the greenback under pressure.
“US gross domestic product data (for the first quarter), roughly in line with expectations, failed to clear investors’ doubts over the US economic recovery,” he said.
He said this led to a sell-off of the US dollar while investors bought more equities on the back of expectations that economic stimulus would last a while longer.
“Hence, the ringgit is expected to trade up to the 4.1000 mark against the US dollar next week,” he added.
Meanwhile, another analyst said the steady oil price, with international benchmark Brent crude oil now above US$69 per barrel, would also benefit the ringgit’s performance.
He said if oil price rise were to continue up to US$70 per barrel, not only the ringgit but also other currencies would get a boost, with oil being one of the country’s sources of revenue.
On the local front, a special session of the National Security Council (NSC) on Covid-19 management has decided to implement a total lockdown on the social and economic sectors (first phase) nationwide for 14 days beginning June 1.
In a statement on Friday, the Prime Minister’s Office said throughout this period, all sectors would not be allowed to operate except for essential economic and service sectors to be listed by MKN.
It said the decision was reached after taking into account the latest Covid-19 situation in Malaysia, with daily cases exceeding 8,000 and over 70,000 active cases.
On a weekly basis, the ringgit appreciated versus the US dollar to 4.1320/1350 from 4.1390/1430 a week earlier.
The local note was mostly higher against other major currencies.
It strengthened against the yen to 3.7598/7629 from 3.8074/8118 a week earlier, increased versus the British pound to 5.8604/8651 from 5.8832/8897 and rose against the euro to 5.0344/0385 from 5.0595/0656.
The ringgit, however, dipped against the Singapore dollar to 3.1213/1238 from 3.1099/1141 in the preceding week.
— Bernama
