The ringgit is expected to stabilize against the US dollar this week
KUALA LUMPUR, April 24 (Bernama): The ringgit is expected to stabilize against the US dollar this week as the US Federal Reserve (Fed) is set to enter a blackout period ahead of its two-day meeting beginning May 3.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Fed officials would refrain from commenting on monetary policy, providing some support for the local currency.
“We are also looking at the possibility of some form of correction occurring next week as technical indicators indicate that the ringgit is in an oversold position, indicating that a correction is quite likely,” he said. he declared to Bernama.
Commenting further on the trend next week, he said the resistance and support level are RM4.34 and RM4.228 respectively.
“I guess it would hover around that level and the performance in ringgits is very volatile right now,” he added.
Meanwhile, Stephen Innes, partner at SPI Asset Management, believes that given China has imposed another lockdown and there is no end in sight to mobility restriction in China as well as to the lack of policy easing from the People’s Bank of China, the ringgit will continue to weaken in tandem with the yuan.
“I think the ringgit would trade between 4.3165 and 4.3475 per US dollar next week,” he said.
On a weekly basis, the ringgit was lower against the greenback at 4.3230/3270 on Friday from 4.2330/2380 a week earlier.
The ringgit ended lower and hit the 4.30 level against the US dollar on Friday, a level last seen in June 2020.
In terms of year-to-date performance, the local currency depreciated by 2.75%, reflecting weak global sentiment and following the pace of the Chinese yuan.
Meanwhile, the local unit traded lower against a basket of major currencies on a Friday-Friday basis.
The ringgit fell against the Singapore dollar to 3.1633/1667 from 3.1198/1242 a week earlier, slipped against the Japanese yen to 3.3652/3686 from 3.3465/3510.
The local currency weakened against the British pound to 5.5641/5693 from 5.5308/5374 last week and eased against the euro to 4.6710/6753 from 4.5776/5830 previously. – Bernama