Ringgit will be traded at between RM4.09 and RM4.16 next week

KUALA LUMPUR -- The ringgit is likely to be exchanged cautiously amid aversion from risk-laden currencies and will be traded at between RM4.09 and RM4.16 against the US dollar next week, a dealer said.

Bank Islam Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said there is a risk aversion at the moment following fears over the contagious effect from Argentina, Turkey and South Africa alongside the expected imposition of tariffs by US President Donald Trump’s administration after the expiry of public comment yesterday.

In the meantime, the Non-Farm Payroll (NFP) employment report is expected to show a healthy reading, suggesting that the US Federal Reserve will increase interest rates at the next Federal Open Market Committee meeting on Sept 26.

“In that sense, emerging currencies assets and currencies are likely to be affected including the ringgit,” he told Bernama.

But at least, Mohd Afzanizam said, Malaysia will not experience a twin deficit (current account and fiscal deficits).

On a month-to-date basis, the ringgit versus the dollar has lost about 0.86 per cent, better than the Korean won (-0.89 per cent), the Indonesian rupiah (-0.91 per cent) and the Indian rupee (-1.14 per cent), said Mohd Afzanizam.

“In that sense, the local note could be least affected. The support and resistance levels are around RM4.09 and RM4.15. Perhaps the ringgit would linger around these levels in the immediate terms,” he said.

Meanwhile, Putra Business School Senior Lecturer and Manager for Business Development Dr Ahmed Razman Abdul Latiff said even though the local note has been declining in value against the greenback for the past few days, its performance may still be considered better than other currencies in the region.

“For next week’s outlook, the ringgit will hover between RM4.14 to RM4.16 per dollar,” he said.

On Wednesday, Bank Negara Malaysia maintained the Overnight Policy Rate at 3.25 per cent after the two-day Monetary Policy Committee meeting.

Next week, markets will be closed on Monday and Tuesday, for the Yang Di-Pertuan Agong’s birthday and Awal Muharram respectively.

On a Friday-to-Friday basis, the local note fell to 4.1435/1465 against the greenback from 4.1080/1110 last week.

Against other major currencies, the ringgit was traded lower.

It declined against the Singapore dollar to 3.0139/0163 from 3.0073/1100 and fell against the British pound to 5.3725/3768 from 5.3462/3525 last week.

Against the Japanese yen it eased to 3.7406/7444 from 3.6820/6863 previously and was lower against the euro at 4.8210/8257 from 4.8055/8099.