KUALA LUMPUR: The ringgit is expected to witness cautious trading against the greenback next week on the possibility of higher 10-year United States (US) Treasury yields, which will likely increase the risk appetite for the US dollar, an analyst said.
“Assuming that no surprises emerge from the US data this week, I expect the ringgit/US dollar to continue moving between 4.09 and then 4.07 level next week,” OANDA senior market analyst for Asia Pacific, Jeffrey Halley, told Bernama.
However, ActivTrades trader Dyogenes Rodrigues Diniz said during the week, as the US Federal Reserve kept its interest rate unchanged and the Federal Open Market Committee provided some direction on the US economy, more stimulus and money printing were expected to take place, in order to support its economic growth.
“This could mean the continuation of the downward trend in the US dollar against the ringgit,” he said.
Technically, Dyogenes said traders would focus on the 4.1050 level, where an upward breakout may show an important buying entry point in the coming week.
“A break below 4.0930 could be seen as a continuation of the selling pressure on the US dollar and the next target would be at around 4.0750,” he added.
Besides that, another trader said the firmer oil prices would also lift the ringgit due to their close correlation.
During the week, benchmark Brent crude was moving above the $60 level, at $65-$68 per barrel.
On a Friday-to-Friday basis, the ringgit strengthened versus the US dollar to 4.0870/0930 from 4.1080/1130 a week earlier.
The local note was higher against other major currencies.
It rose against the Singapore dollar to 3.0785/0839 from 3.0936/0978 a week earlier and strengthen against the Japanese yen to 3.7520/7581 from 3.8069/8119.
The ringgit gained vis-a-vis the British pound to 5.6834/6930 from 5.7007/7093 last Friday and increased against the euro to 4.9428/9509 from 4.9522/9595 a week ago. – Bernama