KUALA LUMPUR,. The ringgit is expected to trade between RM4.23 and RM4.24 against the US dollar next week with the market expected to be calmer after the country’s latest political development, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
Yesterday, Istana Negara announced that the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah has appointed Datuk Seri Ismail Sabri Yaakob as the new Malaysian prime minister after he gained support from 114 Members of Parliament.
The swearing-in ceremony for the new prime minister is scheduled for 2.30 pm today.
Adam said the ringgit could see some tailwind as the market is expected to be calmer since Istana Negara has released the statement on who will be the next prime minister.
“However the tailwinds could likely be limited ahead of the Jackson Hole conference which is scheduled to be held between August 26 and 28, 2021. If the picture of an earlier-than-expected tapering of asset purchases by the US Federal Reserve (Fed) appears from the symposium, the US dollar might strengthen and exert downward pressure on the ringgit,” he told Bernama.
ActivTrades trader Dyogenes Rodrigues Diniz said the ringgit had been moving sideways against the greenback for the week just ended.
“The latest Federal Open Market Committee (FOMC) report revealed that US Fed policymakers are beginning to talk about cutting the financial stimulus, which is currently at US$120 billion a month.
“Once they cut stimulus, the next step will be to raise the interest rate and this view has been behind a significant rise in the greenback against most of its counterparties,” he said.
For the week just ended, the local note was mostly lower throughout the week on worries over the higher daily Covid-19 cases, coupled with the declining oil price.
Malaysia recorded 23,564 new Covid-19 cases yesterday, the third consecutive record-breaking day, bringing the cumulative total infections to 1,513,024 cases.
On a weekly basis, the ringgit settled at 4.2380/2400 against the greenback from 4.2365/2385 a week ago. The ringgit was traded mostly higher against other major currencies compared to a week earlier.
It appreciated against the Singapore dollar at 3.1070/1087 from 3.1187/1207 a week before, rose against the British pound at 5.7709/7736 from 5.8476/8504, and advanced against the euro to 4.9474/9498 from 4.9775/9798 previously
However, the local note weakened vis-a-vis the Japanese yen at 3.8654/8676 from 3.8409/8427 in the preceding week. ― Bernama