‘Ringgit likely to strengthen, slowing US interest rate pace to pressure greenback’

KUALA LUMPUR: The ringgit is expected to trend higher versus the US dollar as there is little data to suggest that United States yields could rise much while China’s Covid-19 policy shift is a major driver for the ringgit.

SPI Asset Management managing director Stephen Innes said the local note would trade around the 4.60 range against the US dollar

“A further push towards the US dollar unwinding may be the dominant narrative for now but be mindful of choppiness moving into year-end,” he told Bernama.

Innes emphasised that foreign issues, particularly development in China, play a larger effect in affecting the ringgit than the announcement of the country’s gross domestic product.

“However, the (announcement) will (have an impact on the ringgit) because the bank can shift its priority to growth policies rather than inflationfighting policies,” he added.

Earlier today, BNM announced that Malaysia’s economy grew by 14.2 per cent in the third quarter this year supported by continued expansion in domestic demand, firm recovery in the labour market, robust electrical and electronics (E&E) as well as non-E&E exports and ongoing policy support.

Meanwhile, another analyst believes that the US Federal Reserve would take a more moderate approach to interest rates as a result of the lowerthan-expected US inflation figures.

According to data issued on Thursday, the consumer price index rose 7.7 per cent year-onyear but fell from 8.2 per cent last month.

On a weekly basis, the ringgit jumped 2.65 per cent on Friday against the US dollar to 4.6200/6250 compared with 4.7460/7495 a week earlier.

Against a basket of major currencies, the local note traded easier on a Friday-to-Friday basis.

It depreciated against the Singapore dollar to 3.3527/3568 from 3.3517/3546 at the end of last week and dropped vis-a-vis the Japanese yen to 3.3047/3088 from 3.2111/2137 a week earlier.

The ringgit eased against the British pound to 5.4322/4381 from 5.3231/3270 and weakened against the euro to 4.7471/7522 from 4.6383/6417.