KUALA LUMPUR, April 27 — The better-than-expected US economic growth may see the dollar climb higher from next week onwards, perhaps leaving the ringgit to test the upper limits of the 4.10-4.15 range, says FXTM analyst Han Tan.
The US Department of Commerce yesterday announced that the US economy grew by 3.2 per cent in the first quarter of 2019, the fastest pace of first-quarter growth since 2015.
“This underscores expectations that the trading of the local note versus the greenback will remain range-bound, barring any headline or event risks that may trigger sharp movements either way,” he said.
He also said that Malaysia’s March consumer price index of 0.2 per cent announced on Wednesday also dispelled concerns surrounding the disinflation that was registered in January and February, suggesting that inflation should remain manageable for the year.
The analyst noted that come Monday, most Asian currencies will react to the US first quarter gross domestic product data.
“As for the domestic economic calendar in the week ahead, the March external trade data due on Friday, May 3 will be a key measure of the Malaysian economy, and investors will be keen to find out whether imports and exports for the month rebounded from February’s year-on-year declines, amidst US-China trade tensions and moderating global growth.
“Even as the ringgit remains primarily driven by external factors, economic indicators that strengthen the narrative about Malaysia’s resilience in the face of external headwinds should solidify support around the ringgit,” he added.
For the week just ended, the ringgit traded mixed to easier tracking among others the global crude oil prices, consumer price index as well as Bank Negara’s dovish bets.
On a Friday-to-Friday basis, the ringgit eased to 4.1310/1340 against the US dollar from 4.1300/1350 previously.
It rose against the Singapore dollar to 3.0306/0332 from 3.0473/0514 previously, but versus the Japanese yen it dropped to 3.6966/6997 from 3.6898/6949.
However, the ringgit climbed against the British pound to 5.3302/3362 from 5.3707/3792, and strengthened vis-a-vis the euro to 4.6007/6044 from 4.6446/6506 previously. — Bernama
The Monetary Authority of Singapore waded into the issue of the difficulties that economists face when trying to predict a country’s gross domestic product (GDP) growth and upcoming economic recessions and recoveries. — Bernama
