Friday 26 June 2009

FOREX: Ringgit Likely To Move Within Tight Range Against USD Next Week

KUALA LUMPUR, June 27 (Bernama) -- The ringgit is expected to move within a tight range against the US dollar next week amid lingering concerns over global economy, dealers said.

They said the investors would keep a close watch on the movements of the greenback because if it were to go up, it would put pressures on the local currency.

A dealer said in the short term, the ringgit was likely to remain within the RM3.52-RM3.54 range to the dollar, with near term target at RM3.50.

He said overseas, the US dollar and yen were likely to move further downwards against most of their major counterparts on bets US, European and Chinese central banks' efforts to stabilise the global economy would spur demand for higher-yielding assets.

An analyst from RHB Investment Bank said in the short term, rising risk appetite would weigh on the US dollar.

On the local front, the market sentiment was seen as encouraging as inflows of foreign funds were expected to increase in the coming months given its status as a lower-beta market.

Foreign funds were net buyers of US$154 million worth of Malaysian shares last month compared with US$36 million in April, according to Emerging Portfolio Fund Research.

"All these positive signs would provide strong support to the local currency market," the analyst said.

On a week-to-week basis, the ringgit was firmer against the US dollar at 3.5300/5350 compared with 3.5350/5390 last Friday.

The local unit strengthened against the Singapore dollar to 2.4245/4304 from 2.4256/4305 previously but weakened against the yen at 3.6782/6850 from 3.6406/6458 previously.

It declined against the euro to 4.9561/9642 from 4.9112/9178 last Friday and went down against the British pound at 5.8121/8218 from 5.7857/7941 previously.


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