KUALA LUMPUR, Oct 3 ― The ringgit is expected to trade in a tight range next week with all eyes on crude oil prices, says AxiCorp chief global market strategist Stephen Innes.
He said crude oil price is the real wild card for the moment with benchmark Brent crude oil price trading below US$39 (RM162) per barrel yesterday.
“I expect risk sentiment will settle down, but of course, the oil market has underperformed so much this week; that is a big concern for next week's view.
“However, I think regardless of oil prices, Asian currencies like the ringgit with a strong correlation to the Yuan will hold up relatively well as I do not think the US dollar is a safe bet in this environment,” he told Bernama, anticipating the ringgit to trade between 4.15 and 4.17 next week.
On the ringgit’s performance for this week, Innes said the local note traded lower on Friday after three consecutive days of gains amid profit-taking activities.
He said the lack of a US stimulus package bill was a major risk aversion trigger for Asian currencies but more idiosyncratic to the ringgit was the fallout from the US banning imports of palm oil from FGV Holdings Bhd due to apparent labour issues.
On a Friday-to-Friday basis, the ringgit rose marginally higher against the US dollar to 4.1620/1660 from 4.1650/1700 in the previous week.
The ringgit declined against the Singapore dollar to 3.0502/0543 from 3.0264/0307 last Friday and fell versus the yen to 3.9582/9631 from 3.9490/9549.
The local unit depreciated vis-a-vis the British pound to 5.3748/3821 from 5.3008/3088 and traded lower against the euro to 4.8766/8830 from 4.8489/8564 previously. ― Bernama
