Ringgit seen to trade on upside bias this week

The ringgit is expected to trade on the upside bias moving between 4.1025 and 4.1225 tio the US$ this week

KUALA LUMPUR: The ringgit is expected to trade on the upside bias moving between 4.1025 and 4.1225 this week, predominantly driven by the movement of the US dollar and influenced by the US Federal Reserve’s (Fed) taper decision.

SPI Asset Management global managing partner Stephen Innes said the ringgit was traded on moderately better footing as foreign exchange investors bought into the Fed’s current mantra to remain dovish regardless of strong economic data in the near term.

On another note, he shared that China’s trade surplus jumped to US$42.9bil (RM176.43bil) in April from US$13.8bil (RM56.75bil) in March, which was larger than expected, outstripping analysts’ expectations as exports continued to rise.

“This should help drive US dollar/Chinese yuan downside in the near term. That, in turn, should benefit the currencies of economies with large China export.

“Given that Malaysia has solid export ties with China, it could also provide a bullish fillip to the beleaguered ringgit, ” he told Bernama.

Meanwhile, Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid (pic above) opined that the US dollar/ringgit pair would move in a tight range this week with all eyes on the first quarter (Q1) 2021 gross domestic product (GDP), which will be published tomorrow.

“We are pencilling in a 1.5% contraction in the Q1 2021 GDP, ” he added.

On a Friday-to-Friday basis, the ringgit weakened versus the US dollar to 4.1100/1140 from 4.0870/0930 a week earlier.

The local note was also lower against other major currencies. It fell against the Singapore dollar to 3.0870/0916 from 3.0785/0839 a week earlier and slipped against the Japanese yen to 3.7662/7702 from 3.7520/7581. — Bernama

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