Selangor Journal

Ringgit to trade at current levels next week

KUALA LUMPUR, July 17 — The ringgit is expected to trade at current levels next week and is poised to reach the 4.30 level against the US dollar should risk-on sentiment hold and oil prices continue to decline, according to a trader.

The lack of local positive catalysts coupled with the high number of Covid-19 cases would dampen investors’ confidence and they may adopt a wait-and-see approach, the trader explained.

On Friday, the Ministry of Health reported that new Covid-19 cases declined to 12,541 compared with 13,215 infections the day before, bringing the cumulative number of domestic cases to 893,323.

Meanwhile, Malaysian Industrial Development Finance Bhd research economist Abdul Mui’zz Norhalim said the ringgit is expected to be influenced by growth concerns as the market is expected to continue focussing on the Covid-19 situation in Malaysia.

“Furthermore, we expect the ongoing talks about the quantitative easing tapering by the United States Federal Reserve could also affect the performance of emerging market currencies, including the ringgit.

“For now, we believe the impact of the oil price movement on the ringgit will be rather limited because the market is focusing on near-term growth outlook and changes in the global financial market,” he told Bernama.

Abdul Mui’zz, however, said any further movement in oil prices beyond the current level may provide some positive support to the ringgit, at least from weakening further against the US dollar.

On a weekly basis, the ringgit weakened versus the US dollar to 4.2040/2070 from 4.1895/1940 a week ago.

Meanwhile, the ringgit was lower against other major currencies.

Against the Singapore dollar, the local unit depreciated to 3.1053/1078 from 3.0953/0991 a week earlier and fell against the British pound to 5.8129/8170 from 5.7798/7860.

It also weakened against the euro to 4.9687/9723 from 4.9667/9720 in the preceding week and slipped vis-a-vis the Japanese yen to 3.8180/8207 from 3.8076/8120 previously.

— Bernama

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