KUALA LUMPUR, Aug 17 — The ringgit is expected to trade in a cautious mood next week, while moving in a tight range of between 4.17 and 4.19 against the US dollar as sentiment for USD/MYR remained fragile.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit gained some strength against the US dollar yesterday amidst external uncertainties, and due to the better-than-expected second quarter 2019 (2Q19) gross domestic product result, which came in at 4.9 per cent against consensus estimates of 4.7 per per cent.
The GDP posting was mainly due to private consumption, while investments and government spending were largely tepid, he added.
“Net exports grew at double-digit pace, but, largely driven by a contraction in imports. So, on net growth, prospects are still highly uncertain as consumer spending momentum may not hold up in view of weak sentiments.
“Against such a backdrop, the USD/MYR remained fragile next week and the exchange rate would linger around RM4.17-RM4.19, as risk aversion is expected to remain prevalent,” he told Bernama.
For the week just-ended, the local market saw a volatile trading pattern with risk appetite mostly influenced by the external factors, especially developments in the US-China trade war.
The local market was closed on Monday in lieu of Hari Raya Aidiladha which fell on Sunday.
The ringgit ended the week higher at 4.1760/1810 against 4.1830/1860 recorded on last Friday on the back of the stronger 2Q19 gross domestic product results.
The local currency also traded firmer against most other major currencies.
It rose against the Singapore dollar to 3.0097/0140 from last Friday’s 3.0259/0285, improved versus the Japanese yen to 3.9230/9288 from 3.9522/9561 and edged up against the euro to 4.6283/6346 from 4.6858/6908.
The local currency, however, depreciated vis-a-vis the pound to 5.0763/0828 from 5.0763/0828 as appetite for the British currency strengthened on the country’s latest political developments, with the cross-party government measures being taken to avoid a no-deal Brexit.
The growing optimism over a substantial stimulus package by the European Central Bank also helped push British pound higher. — Bernama