PETALING JAYA: The ringgit is likely to trade broadly around the 3.90 level against the US dollar this week, according to Kenanga Research.
In a note, the research house said domestic stability plays a supporting role in the ringgit’s performance, with US dollar weakness being the primary driver of ringgit gains.
“Solid US data no longer guarantees sustained US dollar strength.
“Strategic diversification flows and recalibrated growth expectations have increased the market’s tendency to monetise rallies.
“A sustained US dollar recovery would require firmer inflation and higher real yields.”
Meanwhile, Bursa Malaysia is likely to remain in a consolidation phase this week following its strong rally recently, with analysts expecting trading volume to stay thin during the long holiday week.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the broader tone should remain constructive as long as buying interest emerges on dips and foreign inflows continue.
“Intermittent profit-taking may also persist, particularly in blue chips that have outperformed, as investors lock in gains and reassess positions.
“If the index holds firmly above the 1,730 to 1,740 support zone, confidence is likely to stay intact, setting the stage for another attempt to push higher.
“As such, we anticipate the FBM KLCI to trend within the 1,730 to 1,760 range this week,” he told Bernama.
Echoing the sentiment, IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said Bursa Malaysia is expected to trade in a mild, range-bound manner this week, reflecting a shortened trading period and thinner regional liquidity due to the Chinese New Year holiday.
“Foreign fund flows into heavyweight counters are likely to be more tactical and externally driven, increasing sensitivity to overnight global cues rather than Asia-led positioning.”
