KUALA LUMPUR, May 23 (Bernama): The ringgit is likely to move lower between 4.12 and 4.16 against the US dollar this week given the pressure by the rising COVID-19 cases in the country and lack of positive catalysts.
OANDA senior market analyst Jeffrey Halley said although the US dollar would also likely weaken, the ringgit is expected be influenced more by sentiments and short-term flows of funds as opposed to data performances.
"With that in mind, the outlook for the ringgit very much depends on COVID-19 developments and oil prices. Oil prices still look like they have room to correct lower especially if a US and Iran agreement is officially announced.
"That will offset any benefits that the ringgit may receive from a weaker US dollar generally as inflation concerns take a temporary back seat," he told Bernama.
Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said after reaching the 4.1470 level, the US dollar started to retrace back against the ringgit and is now showing initial selling pressure.
This, he said, is driven by the Malaysian Consumer Price Index (CPI) which came in lower than expected.
"Fears surrounding Malaysian inflation has been around since the last reading of the CPI, which went from negative ground (deflation) to the highest number in four years (4.7 per cent against 4.9 per cent that the market forecast).
From a technical point of view, if the ringgit/US dollar price breaks below 4.1350, it could fluctuate to 4.1220. On the other hand, if the price manages to break above 4.1500, it could go to the 4.1700 level," said Diniz.
On a weekly basis, the ringgit weakened versus the US dollar to 4.1390/1430 from 4.1230/1280 a week earlier.
The local note was also lower against other major currencies.
It moved lower against the Singapore dollar to 3.1099/1141 from 3.1023/1073 a week earlier and declined against the yen to 3.8074/8118 from 3.7909/7966.
The ringgit slipped vis-a-vis the British pound to 5.8832/8897 from 5.8279/8353 on Friday last week and dipped against the euro to 5.0595/0656 from 5.0028/0102. - Bernama