Ringgit expected to trade under pressure next week

KUALA LUMPUR, Sept 12 (Bernama): The ringgit is likely to trade under pressure against the greenback this week amid profit-taking activities, said an economist.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the appreciation of the local note continued since Thursday with the ringgit ending the week at RM4.1300.

On Friday (Sept 10), the US dollar Index was seen declining to 92.371 despite better-than-expected jobless claims for the week ended Sept 4.

He said the delay in the tapering of asset purchases may have been the driving force for the emerging market currencies, including the ringgit.

"Hence, markets shall see whether such thesis would last despite the high vaccination rate in the developed countries.

"More importantly is how the high vaccination rate would translate into the re-opening of the economy, which then would accelerate economic activities,” he told Bernama.

Mohd Afzanizam added that in the event this happens, talks of asset purchases would resurface again, resulting in volatile movement in the currency market.

"At this level, the speed of the ringgit appreciation has been remarkable,” he said.

For the week just ended, the local note was traded mostly higher throughout the week as the greenback continued to fall.

On a weekly basis, the ringgit strengthened to 4.1340/1370 against the greenback on Friday from 4.1445/1475 a week ago.

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

It was slightly higher against the Singapore dollar at 3.0867/0892 from 3.0876/0903 a week before and rose against the British pound to 5.7347/7388 from 5.7352/7393.

The local note also widened against the euro to 4.8934/8970 from 4.9195/9231 and advanced on the Japanese yen to 3.7592/7623 from 3.7705/7735 on the previous Friday. - Bernama

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