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Ringgit Likely To Strengthen Against US Dollar Next Week

KUALA LUMPUR – The ringgit is expected to further strengthen against the US
dollar next week to between 4.4000 and 4.3500, riding on the greenback’s weakness
in the global market, an analyst said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr
Nazri Khan Adam Khan, said the greenback has pulled back from its seven-week
high.

“The weakness in the greenback was contributed by negative perception that
the US economic data may not be strong enough to justify the US interest rate
increase.

“The Federal Reserve’s statement after its first meeting this year was
also not overly-hawkish which casts doubts on rate adjustments for next meeting
in March,” he told Bernama.

He said other central banks, like Bank of Japan and Bank of Europe, were
also seen as being accomodative and did not increase their interest rates.

On the local front, the rebound in crude oil prices and other commodities
will also lend support to strenghten the ringgit as it has always been seen as
commodity currency, said Nazri

Meanwhile, Hong Leong Research said, the ringgit had strengthened 0.16 per
cent week-on-week to 4.4230 against the greenback but slipped against the
currencies of nine of the Group of 10 countries in the absence of buying
interest as the Malaysian market was closed for Chinese New Year and Federal
Territory holidays.

“We still hold a slightly bullish view on the ringgit against the US dollar.
We acknowledged that much of next week’s direction will hinge on tonight’s US
employment data and the ability of the greenback to rebound.

“The extended recovery in oil prices will be partially supportive of the
ringgit,” it said.

For the week just-ended, the ringgit moved between 4.4220 and 4.4320 against
the US dollar.

On Friday-to-Friday basis, the ringgit was traded higher at 4.4260/4300
against the greenback from last Friday’s 4.4300/4330.

The local note ended lower against other major currencies, except the
British pound.

The ringgit depreciated versus the Singapore dollar to 3.1292/1330 from
3.1046/1078, decreased against the yen to 3.9123/9165 from 3.8522/8565 and
declined against the euro at 4.7535/7600 from 4.7370/7411.

It rose against the British pound to 5.5250/5304 from 5.5588/5643.
— BERNAMA