Selangor Journal
Malaysian ringgit notes are seen among US dollar bills in this photo illustration taken in Singapore, on August 24, 2015. — File picture REUTERS

Kenanga expects ringgit to rebound against US dollar

KUALA LUMPUR, April 25 — Kenanga Investment Bank Bhd (Kenanga) expects the ringgit to rebound and appreciate by 0.9 per cent to 4.286 against the US dollar this week.

The research house said the safe-haven US dollar may face a short-term pullback due to its overbought position, with the US dollar/ringgit pair projected to trade in the range of 4.226-4.276.

“Inversely, a break above the 4.350 level may signal a continuation of the US dollar’s bullish run,” it said in a note today.

Kenanga said last week, the ringgit experienced strong selling pressure and weakened by 2.11 per cent week-on-week, the fastest pace of depreciation in 109 weeks.

“The ringgit breached the 4.30 threshold for the first time since June 2020 as the US dollar index (DXY) climbed above the 101.0 level due to weak global economic sentiment as the United States Federal Reserve chair Jerome Powell hinted that a 50 basis points hike in May is ‘on the table’.

“In addition, the ringgit was also pressured by the weakening of the yuan, mainly due to China’s capital outflows,” it said.

For this week, it said the DXY is expected to remain strong and consolidate around the 100.0 level while the Chinese yuan may continue to remain weak near the 6.50 threshold — a combination that may continue to pressure most Asian currencies, including the ringgit.

“Amid heightened market volatility, the ringgit may remain on a bearish trend and hover between 4.30-4.35.

“However, the local note’s depreciation may be limited by the lack of pro-dollar catalysts and a potential market correction,” it added.

— Bernama

 

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