KUALA LUMPUR, March 26 — The ringgit is expected to trade on the upside bias moving between RM4.19 and RM4.20 next week, amid better risk appetite and fairly positive domestic economic data and outlook, an analyst said.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit had gained some strength on Friday despite the uncertainties over the conflict in Ukraine as domestic economic data suggested inflation rate is still fairly contained.
February consumer price index was up at a slower rate of 2.2 per cent compared to 2.3 per cent in the preceding month as well as lower than the consensus estimates of 2.4 per cent.
On another note, foreign net inflows in the equities market space have been quite encouraging with total net purchases of slightly more than RM6 billion on a year-to-date basis compared to net sales of RM3.1 billion for the whole of 2021.
“This means the ringgit should be well supported in the event that such flows remain persistent throughout the year.
“Further reopening of the economy would also translate into more dynamic business activities and, therefore, companies earnings. This could incentivise foreign funds to be constructive on our bourses along with attractive valuation,” he told Bernama.
Meanwhile, from a technical standpoint, ringgit versus the US dollar is already in the oversold region, signalling the ringgit would likely appreciate in the near term, he said.
“With the current resistant and support level located at RM4.2104 and RM4.1870 respectively, next week, we would be able to stage some appreciation, around RM4.19 to RM4.20,” he added.
On a weekly basis, the ringgit was lower against the greenback at 4.2080/2110 from 4.1930/1975 a week ago.
The local currency was traded mixed against a basket of major currencies on a Friday-to-Friday basis.
It rose against the Japanese yen to 3.4608/4633 from 3.5259/5300 and improved vis-a-vis the euro at 4.6305/6338 from 4.6370/6420.
The local unit fell against the British pound to 5.5394/5434 from 5.5100/5159 and eased against the Singapore dollar to 3.1021/1045 from 3.0924/0960 a week earlier. — Bernama