Ringgit seen trading at range-bound at RM4.38 to RM4.40 against the US dollar this week


KUALA LUMPUR, May 22 (Bernama): The ringgit is expected to move range-bound between RM4.38 and RM4.40 against the US dollar this week as investors mull cutting their long US dollar exposure in G10 currencies due to rising worries over a possible global recession, said an analyst.

The G10 is a grouping of industrialised countries, whose members include the United States, the United Kingdom, Japan, and France.

SPI Asset Management managing partner Stephen Innes said the cutting back on long US dollar positions would likely filter through to Asian foreign exchange (FX) and strengthen the ringgit against the greenback.

He said traders are starting to price in a recession, so the US growth and economic data will continue to be under the market glare.

"Since interest rate traders are now pricing in a recession, interest rates along the US Federal Reserve (US Fed) curve, namely for late 2023 and 2024, are starting to reprice lower and the market has backed off on any thought of a 75-basis point US rate hike in July,” he told Bernama.

"This will be less favourable for the US dollar. I think that could also cause the US dollar-ringgit to move lower on broader US dollar weakness. So the ringgit could strengthen,” he continued.

"Besides, I think the interest rate cut by China signals that the mainland is moving closer to reopening (its economy), so I can see the ringgit trade on a better tone and move into the RM4.38 level, so I look for RM4.38-RM4.40 (against the US dollar) next week.”

However, Innes said that if US economic data makes a comeback, it could stop the Asian foreign exchange uptrend in its tracks.

For the week just ended, the ringgit’s movement against the US dollar was influenced by the Chinese yuan and worries over a global recession. US Fed comments on easing price pressures, the expectation of an economic reopening in Shanghai, and the interest rate cut by China also played a role.

On a weekly basis, the ringgit was higher against the greenback at 4.3870/3910 on Friday compared to 4.3980/3995 a week earlier.

The local note traded lower against a basket of major currencies on a Friday-to-Friday basis.

The ringgit fell against the Singapore dollar to 3.1845/1879 from 3.1482/1497 a week earlier and declined versus the British pound to 5.4732/4782 from 5.3568/3586 last week.

It was down against the euro to 4.6445/6488 from 4.5625/5640 and depreciated vis-a-vis the Japanese yen to 3.4236/4270 from 3.4127/4142 previously.

The market was closed on Monday for a public holiday. - Bernama

Article type: free
User access status:
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Ringgit , US dollar , FX , Weekly , recession , China , Stephen Innes

   

Next In Aseanplus News

Asean News Headlines at 9pm on Saturday (June 25, 2022)
Singapore: More than 300 suspects rounded up this week under police investigation for scamming victims of RM19 million
Indonesian palm oil farmers call for removal of local sales rules
Thailand records 2,236 new Covid-19 cases and 16 deaths on Saturday (June 25)
Duterte ends China oil talks, leaving big task ahead for new Philippines' president Marcos
Vietnam reports 657 new Covid-19 cases on Saturday (June 25)
North Korea denounces U.S. 'aggression' as it marks war anniversary
Japan records hottest June day amid energy squeeze
Countries should do much more together to prepare for next pandemic, says Singapore PM at Commonwealth leaders' meeting
Indonesia to buy 29 million foot and mouth disease vaccine doses as outbreak worsens

Others Also Read