KUALA LUMPUR, Aug 13 — The ringgit is expected to strengthen next week against the US dollar on the back of recovering crude oil prices recovery, a dealer said.
Hong Leong Research, in a note, said week-on-week, the local currency had strengthened 1.2 per cent to 4.0045 against US dollar and advanced against nine of the G10 currencies, supported by firmer risk appetite in the markets and revival in oil prices.
“We are slightly bullish on the ringgit next week as we anticipate further upsides in oil prices and potential risk aversion in the greenback approaching the Federal Open Market Committee (FOMC) minutes next week,” said the research house.
However, it said gains would likely be moderate given the recent sharp advances.
“US$/RM would continue to hover near the 4.00 region with advances likely to be blocked by 4.0110.
“We reckon more downsides to US dollar next week due to risk aversion going into the release of FOMC minutes, which will provide further clue to the Federal Reserve's intention on policy changes,” it added.
For the week just-ended, the ringgit was traded higher on Tuesday, Wednesday and Thurday supported by the rise in crude oil prices and the demand for government bonds.
It was traded lower on Monday and Friday on market expectation of US interest rate increase this year, which had lifted the dollar.
On a Friday-to-Friday basis, the local note fell against the greenback to 4.0260/0310 from 4.0200/0250 previously.
Against other currencies, the ringgit ended mostly higher except the euro.
The ringgit increased against the Singapore dollar to 2.9898/9939 from 2.9993/9033 last Friday, gained against the yen to 3.9393/9454 from 3.9806/9875 and rose against the British pound to 5.2153/2230 from 5.2911/2989 previously.
The local note depreciated against the euro to 4.4882/4946 from 4.4783/4855 last Friday. — Bernama
