KUALA LUMPUR, Aug 1 — The ringgit will likely continue its uptrend against the US dollar next week as market sentiment towards Asian currencies continues to thrive amidst the wobbly US dollar.
During its two-day meeting, which ended on July 29, the US Federal Reserve decided to hold rates steady and reiterated that any wobbles in growth and bond yields would be met with a wall of Fed money.
OANDA Asia-Pacific senior market analyst Jeffrey Halley said most importantly, Fed chairman Jerome Powell also reassured markets that they would alleviate any shortages of off-shore US dollars if necessary.
“This will be a sigh of relief to emerging markets and pave the way for the recommencing of the US dollar sell-off,” he added.
Another dealer said sentiment towards the ringgit would also be lifted by higher exports registered in June 2020.
Bank Negara Malaysia (BNM), on Tuesday, announced that Malaysia’s exports registered a turnaround to grow by 8.8 per cent in June this year after contracting 25.5 per cent in May 2020.
The central bank also said that exports were expected to gradually pick up in the second half of 2020, as external demand improves with the easing of containment measures in most economies.
On a Thursday-to-Friday basis, the ringgit ended sharply higher against the greenback at 4.2380/2420 from 4.2620/2660 the previous week.
However, the local note was traded lower against other major currencies.
It fell against the Singapore dollar to 3.0806/0849 on Thursday from 3.0764/0797 the previous Friday and decreased versus the Japanese yen to 4.0350/0400 from 4.0068/0117.
The local currency depreciated against the British pound to 5.5102/5176 from 5.4268/4336 and weakened vis-a-vis the euro to 4.9826/9882 from 4.9426/9481 previously.
The local market was closed on Friday, July 31, 2020 for the Aidiladha celebration.