Ringgit May Range At Rm4 57 Rm4 60 Next Week

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The ringgit appears to be at an oversold position based on technical indicators, says an analyst.PETALING JAYA: The ringgit will likely trade at a narrow range of RM4.57 to RM4.60 against the US dollar next week due to indications of a stronger greenback, said an analyst.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said financial markets seemed anxious about the global growth prospects after China reported a decline in their exports for three months in a row and negative consumer price index (CPI) print this week.
Furthermore, he said that signals from the US Federal Reserve are still mixed with some officials favouring the interest rate to stay elevated for a prolonged period.
Ads by KioskedWith that in mind, data points from China should continue to take centre stage next week, said Afzanizam.
Data points on retail sales, industrial production (IP), and fixed asset investment (FAI) will be the key focus to gauging the health of China’s economy, he noted.
“Currently, the support and resistance level for the US dollar/ringgit (USD/MYR) pair is located between 4.5491 and 4.6257.
He said there exists a possibility that the ringgit may appreciate given the technical indicator suggesting that it is already at an oversold position.
He said the ringgit may appreciate as technical indicators suggest that it is currently at an oversold position.
“The USD/MYR might continue to linger within a tight range as foreign exchange market participants have become risk averse, leading to higher demand for the US dollar,” he told Bernama.
Ads by KioskedHong Leong Research, in a note, said that the US dollar traded higher for a second straight week, advancing by 0.3% week-on-week after Malaysia’s industrial production for June contracted by more than expected, reinforcing expectations of a slowing economy.
Meanwhile, the ringgit was mixed against major currencies and Asian peers.
“The focus will be on the weekend state elections and second-quarter gross domestic product (GDP) data on Aug 18 domestically, where we expect growth to decrease by half from the 5.6% registered in the first quarter.
The ringgit’s direction will also be influenced by the greenback’s movement, and its relationship with the renminbi, it added.
On a Friday-to-Friday basis, the ringgit was lower against the US dollar at 4.5865/4.5895 from 4.5515/4.5565 a week earlier.
The local unit was also traded mostly lower against other major currencies.
Ads by KioskedIt fell against the British pound to 5.8230/5.8268 from 5.7836/5.7899 the previous Friday, slipped versus the euro to 5.0351/5.0384 compared to 4.9816/4.9871 but appreciated vis-a-vis the Japanese yen to 3.1712/3.1735 from 3.1898/3.1935 previously.
In the meantime, the ringgit was traded mixed against its Asean peers.
The local unit eased against the Singapore dollar to 3.3967/3.3991 from 3.3891/3.3933 a week earlier and declined against the Indonesian rupiah to 301.3/301.6 from 299.9/300.5.
It was better versus the Thai baht at 13.0737/13.0871 from 13.0835/13.1043 and rose vis-a-vis the Philippine peso to 8.14/8.15 from 8.16/8.17 last Friday. - FMT

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