RINGGIT TO BE SOFTER AGAINST US DOLLAR NEXT WEEK

KUALA LUMPUR – The ringgit is expected to be softer against the US dollar and trade between RM4.40 and RM4.50 next week, driven by the local equity market’s performance, said Affin Hwang Investment Bank Vice-President/Retail Research Head, Datuk Dr Nazri Khan Adam Khan.

He said the Federal Reserve System’s (Fed) decision to raise interest rates by 25 basis points, following with two more likely increases next year, would worry the investors.

Meanwhile, FXTM Research Analyst, Lukman Otunuga, said although it was widely expected that US interest rates would be increased by 0.25% amid stronger economic growth, the aggressive hiking path for 2017 which was somewhat reminiscent of the promises made by the Fed in December 2015 sent the greenback to fresh 14-year highs.

“While there still remains a cloud of uncertainty over how economic policy may change under Trump’s presidency, the same rising optimism towards Trump boosting US growth through tax cuts and infrastructure spending may have played a key part in the changes to the Fed’s projections.

“With the Fed displaying optimism over the rise in job gains in recent months and unemployment rate steadily declining, the overall outlook for the world’s largest economy continues to look encouraging,” he said in a statement.

For the week just-ended, the ringgit was traded lower at 4.4755/4795 against the greenback from 4.4215/4255 last Friday.

It ended higher against other major currencies.

The ringgit appreciated against the yen to 3.7899/7959 from 3.8643/8681 last Friday, and increased against the Singapore dollar to 3.1015/1058 from 3.1067/1100 last week.

The local unit rose to 4.6823/6887 against the euro from 4.6974/6034 last Friday and improved against the British pound to 5.5568/5640 from 5.5768/5832 last week.

— Bernama

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