Ringgit to face headwinds this week; to trade between RM4.19-RM4.21 against US dollar

KUALA LUMPUR, Aug 28 (Bernama): The ringgit is likely to experience headwinds from Monday (Aug 30) onwards, trading in the range of RM4.19 to RM4.21 against the US dollar, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.

"Headwinds could appear if the Organisation of the Petroleum Exporting Countries (OPEC) decides to push for more oil production which could cause oil prices to decline and would subsequently affect the ringgit,” he told Bernama.

OPEC is expected to be holding the 20th OPEC and non-OPEC Ministerial Meeting on Sept 1, 2021.

"If the meeting is held, investors will get a sense of the OPEC’s reaction towards US President Joe Biden's remarks on raising oil production faster in order to stabilise gasoline prices,” he said.

Meanwhile, ActivTrades trader Dyogenes Rodrigues Diniz said the King’s acceptance of the ministerial list presented by new Prime Minister Datuk Seri Ismail Sabri Yaakob had brought some encouragement to the Malaysian political situation, which had been plagued by uncertainty since the resignation of the previous prime minister earlier this month.

"On the downside, Malaysia hit a new high for Covid-19 infections (on Thursday, at 24,599 cases) and this is likely to be a main driver for the ringgit’s devaluation.

"From a technical point of view, the ringgit may continue to fall towards 4.1750 against the US dollar, where it is likely to find a strong level of support,” he said.

For the week just ended, the local note was higher throughout the week as investors' confidence was restored following Malaysia's latest political development.

On Friday, Ismail Sabri unveiled his Cabinet line-up, which is formed after Tan Sri Muhyiddin Yassin, who led the Perikatan Nasional government, stepped down as prime minister on Aug 16.

Besides Tengku Datuk Seri Zafrul Abdul Aziz who keeps his position as the Finance Minister, Datuk Seri Mohamed Azmin Ali is also retained as the Senior Minister and International Trade and Industry Minister while Datuk Seri Mustapa Mohamed remained the Minister in the Prime Minister's Department (Economy).

Meanwhile, former Housing and Local Government Minister Datuk Zuraida Kamaruddin has been appointed as the Plantation Industries and Commodities Minister, replacing Datuk Dr Mohd Khairuddin Aman Razali, while Tan Sri Noh Omar will be helming the Entrepreneur Development And Cooperatives Ministry, replacing Datuk Seri Wan Junaidi Tuanku Jaafar.

On Covid-19 cases, the Health Ministry reported on Friday 22,070 new cases and 339 deaths in the previous 24 hours as well as 21,877 recoveries. This brought the cumulative total infections to 1,662,913 cases.

On a weekly basis, the ringgit settled at 4.1890/1930 against the greenback on Friday from 4.2380/2400 a week ago.

The ringgit was traded higher against other major currencies compared to a week earlier.

It appreciated against the Singapore dollar to 3.1009/1041 from 3.1070/1087 a week before and rose against the British pound to 5.7427/7482 from 5.7709/7736 previously.

The local note advanced against the euro to 4.9254/9301 from 4.9474/9498 and strengthened vis-a-vis the Japanese yen to 3.8044/8084 from 3.8654/8676 on the previous Friday. - Bernama

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