KUALA LUMPUR, Nov 1 — The ringgit ended easier against the US dollar on Monday on technical correction following weeks of an almost continuous uptrend.
At 6pm, the local note fell versus the greenback to 4.1500/1530 from 4.1390/1415 at Friday’s close.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the depreciation of the local note was somewhat expected given that the technical indicators suggested that the currency was within the overbought zone.
“Having said that, the ringgit should be positive in the immediate term following the reopening of the economy and sizeable allocation in the Budget 2022 tabled last Friday,” he told Bernama.
He said that the market. however, would be cautiously monitoring the Federal Open Market Committee (FOMC) meeting later this week.
“Foreign exchange markets have been expecting that the US Federal Reserve (Fed) would announce the tapering decision. Perhaps the market is waiting for the FOMC statement to come out in order to gauge the economic assessment by the Fed on whether the interest rate hike could really happen next year. In the meantime, the ringgit should stay soft,” he added.
Commenting on Budget 2022’s impact on the local note, he said that the impact was somewhat neutral and the budget had more impact on the equities since it would affect corporate earnings.
“However, from the macro and credit point of view, it should be positive as the rating agencies would be more patient in respect to fiscal consolidation,” he said.
At the close, the ringgit was on an uptrend against a basket of major currencies.
It improved against the Singapore dollar to 3.0748/0772 from 3.0762/0783 at Friday’s close and rose against the Japanese yen to 3.6327/6356 from 3.6403/6425.
The local note also gained versus the euro to 4.7999/8034 from 4.8232/8261 last Friday and increased vis-a-vis the British pound to 5.6685/6726 from 5.7089/7124 previously.
— Bernama
