Ringgit likely to strengthen against US dollar next week

Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the greenback has pulled back from its seven-week high.

"The weakness in the greenback was contributed by negative perception that the US economic data may not be strong enough to justify the US interest rate increase.

"The Federal Reserve's statement after its first meeting this year was also not overly-hawkish which casts doubts on rate adjustments for next meeting in March," he told Bernama.

He said other central banks, like Bank of Japan and Bank of Europe, were also seen as being accomodative and did not increase their interest rates.

On the local front, the rebound in crude oil prices and other commodities will also lend support to strenghten the ringgit as it has always been seen as commodity currency, said Nazri

Meanwhile, Hong Leong Research said, the ringgit had strengthened 0.16 per cent week-on-week to 4.4230 against the greenback but slipped against the currencies of nine of the Group of 10 countries in the absence of buying interest as the Malaysian market was closed for Chinese New Year and Federal Territory holidays.

"We still hold a slightly bullish view on the ringgit against the US dollar. We acknowledged that much of next week's direction will hinge on tonight's US employment data and the ability of the greenback to rebound.

"The extended recovery in oil prices will be partially supportive of the ringgit," it said.

For the week just-ended, the ringgit moved between 4.4220 and 4.4320 against the US dollar.

On Friday-to-Friday basis, the ringgit was traded higher at 4.4260/4300 against the greenback from last Friday's 4.4300/4330.

The local note ended lower against other major currencies, except the British pound.

The ringgit depreciated versus the Singapore dollar to 3.1292/1330 from 3.1046/1078, decreased against the yen to 3.9123/9165 from 3.8522/8565 and declined against the euro at 4.7535/7600 from 4.7370/7411.