KUALA LUMPUR, March 30 — The ringgit is expected to trade cautiously against the US dollar next week as volatility hits emerging markets due to the strengthening of the US dollar and political instability in Turkey.
The greenback was holding its position firmer supported by the falling British pound as Brexit failed to win majority support in Parliament during the week, while Turkey is holding its nationwide local elections on Sunday.
FXTM research analyst Lukman Otunuga said while the improving sentiment towards the Malaysian economy is likely to support the ringgit, upside gains remain threatened by external factors.
“Technically, the ringgit still remains in a position of power against the US dollar on the daily charts. The US dollar/ringgit has the potential to resume its downtrend if prices can trade back below 4.060,” he told Bernama.
Lukman said the economic calendar in Malaysia is relatively light during the early parts of the week with the Nikkei Manufacturing Purchasing Managers’ Index (PMI) figures for March in the spotlight on Monday.
“Investors will also keep a close eye on the trade figures which should provide an insight into the health of the Malaysian economy,” he added.
Meanwhile, OANDA Asia Pacific senior market analyst Jeffrey Halley said developments from the US-Chiona trade talks the week and and next week have the potential to cause sharp increase in currencies and volatility, regardless of whether the news is good or bad.
“The US dollar/ringgit should hold at 4.0800 on dips with the potential to move higher through 4.0900 to 4.0950 should the trade talks or next weeks data prove negative,” he said.
For the week just ended, the ringgit traded lower against the US dollar on the lack of demand, mainly due to the strengthening of the US dollar technical index and a slower global economic growth outlook.
On a Friday-to-Friday basis, the ringgit fell to 4.0800/0850 from 4.0600/0650 against the US dollar.
The ringgit, however, traded mixed against other major currencies last week.
It marginally eased against the Singapore dollar to 3.0086/0128 from 3.0047/0096 previously, but improved against the euro to 4.5737/5809 from 4.5882/5959.
The local currency appreciated versus the British pound to 5.3122/3203 from 5.3178/3260, but slid versus the Japanese yen to 3.6820/6872 from 3.6735/6784. — Bernama
