Ringgit likely to move within narrow range next week
KUALA LUMPUR, May 4 — The ringgit is expected to move in a tight range next week as investors will be cautious of the impact of the general election tomorrow.
Affin Investment Bank Vice President and Head of Retail Research Dr Nazri Khan expected lacklustre trading next week, with most investors likely to remain on the sidelines pending clarity on post-general election policy.
“However, any market selldown due to political shock is temporary and will normalise within weeks as the market performance over the medium term will be dictated by fundamentals.
“Local factors such as healthy foreign reserves, ample local liquidity, banks’ strong capital base, moderating local inflation and accommodative monetary policy by Bank Negara Malaysia are prime key attractions to pull investors,” he told Bernama.
The ringgit whipsawed throughout the week and fell to a one-week low on Thursday at 3.0495/0525 to the US dollar but ended the week sharply higher at 3.0315/0345 yesterday.
The foreign exchange market was closed on Wednesday for Labour Day holiday. The local note was sharply lower against the euro at 4.0162/0211 on Thursday from 3.9702/9751 on Tuesday, following European Central Bank’s move in lowering its key interest rate to 0.5 per cent from 0.75 per cent, the first cut in 10 months.
On Friday-to-Friday basis, the ringgit was slightly better at 3.0315/0345 versus the US dollar from 3.0330/0375 previously.
Meanwhile, the local unit was traded lower against other major currencies. It weakened against the Singapore dollar to 2.4578/4611 from 2.4489/4545 last Friday and depreciated against the yen to 3.0888/0925 from 3.0717/0778, previously. It declined against the British pound to 4.7139/7200 from last Friday’s 4.6814/6887 and was lower against the euro to 3.9795/9840 from 3.9490/9557 previously. — Bernama