Ringgit Likely To Test New 10-year High Against U.S. Dollar Next Week
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KUALA LUMPUR, (Bernama) — The ringgit is expected to record new 10-year high against the U.S. dollar next week on the greenback’s weakness following market participants’ persistent fear over the fate of the U.S. economy, dealers said.
On Thursday, the ringgit hit a new 10-year high of 3.1460/1480 against the greenback, spurred by expectations that the local currency will pass the RM3.00 mark against the U.S. dollar by year-end.
The ringgit’s gain was triggered by remarks by the Malaysian Institute of Economic Research executive director Dr Mohamed Ariff on Wednesday that the ringgit is still undervalued amid the strong fundamentals of the Malaysian economy.
A dealer said, “Uncertainty over the U.S. economy will continue to pressure the U.S. dollar and if this holds true next week, the ringgit may breach the 3.14 to 3.12 level against the greenback.”
He also said that as a result of the U.S subprime mortgage woes, the dollar has dropped 8.3 percent against the euro and 7.1 percent against the yen since Dec 31, 2007.
Another dealer said speculation that the U.S. Federal Reserve will lower U.S. interest rates in the second quarter will help lift the ringgit further in the medium term.
“A further cut may prompt another round of sell-off on the greenback as players shift to other currencies where interest rates are expected to trend higher,” she said.
On a weekly basis, the ringgit ended stronger against the U.S. dollar at 3.1410/1430 compared with 3.1500/1540 previously.
Against other major currencies, it was lower against the Singapore dollar at 2.3243/3278 from 2.3181/3230 but higher against the Japanese yen at 3.0674/0702 from 3.0955/0004.
The ringgit was easier against the pound sterling at 6.2701/2753 from 6.2244/2336 and also weaker against the euro at 5.0096/0137 from 4.9868/9934.
– BERNAMA
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