Volatile ringgit trading to continue this week?
KUALA LUMPUR: The ringgit weakened near the 4.43 level for the first time since March 2020 against the strengthening US dollar last week, Kenanga Research said.
This was despite Bank Negara Malaysia’s back-to-back 25 basis points overnight policy rate hike and strong domestic retail sales reading.
Kenanga Research said the US dollar index (DXY) soared to above the 107.0 level (near 20-year high) last week due to hawkish US Federal Reserve’s meeting minutes, growing recessionary fears and strong US job growth.
“As market sentiment is expected to remain fragile amid weakening global growth outlook due to a faster-than-expected major central banks’ interest rate hikes, pro-cyclical currencies (i.e. ringgit) may continue to trade in a volatile manner and depreciate against the US dollar.
“Hence, the local note may likely hover around the 4.42-4.44 zone against the greenback as the DXY is expected to remain elevated around the 107.0 level, if US June Consumer Prive Index turns higher-than-expected,” Kenanga Research said.
NST
