Home Tags Posts tagged with "ringgit"

ringgit

KUALA LUMPUR – The ringgit is likely to extend its recovery against the US
dollar next week, as market sentiment has shifted more towards emerging market
currencies, dealers said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr
Nazri Khan Adam Khan said the ringgit was expected to strengthen in the medium
term after the US dollar retreated.

“Ringgit should test the RM4.30/US Dollar threshold on slower expectations
of further US Federal Reserve rate hike in June, while Bank Negara Malaysia is
likely to step in at any further weakness, especially if ringgit trend towards
the RM4.50/US dollar psychological barrier.

“Bank Negara has so far shown commitment to defending the ringgit against
exchange rate volatility via open market operations,” he told Bernama.

Nazri said that the local currency should also get support from stable oil
prices with Brent crude settling at US$51.74 a barrel, while metal prices
strengthened as the dollar dipped, with gold edged up one per cent at US$1,226
an ounce and copper rose 0.7 per cent to US$5,908 a tonne.

The ringgit has begun its recovery phase this week, benefiting from the
uncertainty over the US interest rate outlook for this year.

Despite having decided to increase the interest rate by 25 basis-point after
the two-day Fed meeting on Wednesday, the Fed failed to give a hawkish message
on its projections of three rate increases in 2017.

Most investors have indicated that there would be no pick-up in the pace of
the US monetary tightening this year.

For the week just ended, the ringgit moved between 4.4480 and 4.4340 against
the US dollar. On a Friday-to-Friday basis, the ringgit traded higher at
4.4340/4370 against the greenback from 4.4490/4540.

Against other major currencies, the local note finished mostly higher.

The ringgit depreciated versus the Singapore dollar to 3.1638/1682 from
3.1384/1424 last week and weakened against the yen to 3.9156/9196 from
3.8566/8620.

Against the British pound, it slipped to 5.4933/4983 from 5.4167/4241, but
declined against the euro at 4.7767/7818 from 4.7217/7275.
— BERNAMA

KUALA LUMPUR – The ringgit is likely to see range-bound trade next week with
the support level at 4.4390 and resistance of 4.4625, according to Hong Leong
Bank (HLB) Research.

It said it is also not impossible for the US dollar to retreat next week,
which would allow for a moderate advance in the ringgit.

“Otherwise, expect the current bearish tone for the ringgit to persist.

“The technical viewpoint suggests that there is potential for the rate to
reverse into a bearish bias if it continues to fail to close above 4.4630,” it
said in a note.

On the upcoming US Federal Open Market Committee (FOMC) meeting on
March 14-15, HLB said the market had priced in a definite hike in US Federal
Reserve (Fed) funds target range to 0.75- 1.00 per cent.

“Gains in the US dollar have been strongly anchored on the Fed rate hike.

“We suspect the bullish tone in the US dollar may be coming to a halt. We
reckon that a sell-off may occur ahead of and post-FOMC decision,” said the
research house.

For the week just-ended, the ringgit moved between 4.4480 and 4.4590 against
the US dollar.

On a Friday-to-Friday basis, the ringgit traded higher at 4.4490/4540
against the greenback from 4.4520/4570.

Against other major currencies, the local note finished mostly higher.

The ringgit appreciated versus the Singapore dollar to 3.1384/1424 from
3.1470/1523 last week and advanced against the yen to 3.8566/8620 from
3.8960/8018.

Against the British pound, it rose to 5.4167/4241 from 5.4439/4514, but
declined against the euro at 4.7217/7275 from 4.6817/6883.
— BERNAMA

KUALA LUMPUR – The ringgit is expected to trade lower at 4.48 to the US dollar
next week, on rising expectations of the Federal Reserve (Fed) raising interest
rates this month.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr
Nazri Khan Adam Khan said the local note will be pressured further by the rise.

“The market focus is now on the Fed policy meeting on March 14-15,” he told
Bernama.

However, Nazri said the market will be somewhat cushioned by the good news
brought on by Malaysia and Saudi Arabia’s strong economic collaboration, coupled
with healthy macro data, with leading economic indicators having shown an
increase of 0.9 per cent.

For the week just-ended, the ringgit moved between 4.4370 and 4.4520 against
the US dollar.

On a Friday-to-Friday basis, the ringgit traded lower at 4.4520/4570
against the greenback from last Friday’s 4.4370/4440.

Against other major currencies, the local note traded mostly higher.

The ringgit appreciated versus the Singapore dollar to 3.1470/1523 from
3.1612/1666 last week and increased against the yen to 3.8960/8018 from
3.9440/9513.

The British pound rose to 5.4439/4514 from 5.5622/5719 and improved against
the euro at 4.6817/6883 from 4.7001/7084.
— BERNAMA

KUALA LUMPUR – The ringgit is expected to trade lower against the US dollar
next week, moving between 4.44-4.45, a dealer said.

He said the local currency would be influenced by external economic
conditions, including any decision and announcement made by US President Donald
Trump.

“Sentiment will also be influenced by an expected US interest rate hike
anytime soon following the strong employment and inflation data released,” the
dealer said.

Meanwhile, for the months of December 2016 and January 2017, BNM said
exports conversion exceeded imports by US$372.9 million and US$741.3 million
respectively.

“This may be good and provide support to the ringgit in the short term,” the
dealer explained.

For the week just-ended, the ringgit moved between 4.4470 and 4.4510
against the US dollar.

On a Friday-to-Friday basis, the ringgit was traded lower at 4.4510/4550
against the greenback from last Friday’s 4.4420/4470.

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

The ringgit depreciated versus the Singapore dollar to 3.1416/1451
from 3.1235/1277, decreased against the yen to 3.9417/9463 from 3.9081/9129
and weakened against the euro to 4.7372/7428 from 4.7263/7334 .

It rose against the British pound to 5.5273/5336 from 5.5516/5588 .
— BERNAMA

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

KUALA LUMPUR – The ringgit is likely to improve to 4.40 level against the US
dollar next week as sentiment towards the local note has started to improved,
a dealer said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr
Nazri Khan Adam Khan, said Malaysia’s strong economic fundamentals and the
higher crude oil and commodity prices would continue to support the ringgit.

“Better trade data from China in terms of higher imports can potentially
translate into better exports for Malaysia, thus boosting the ringgit recovery,”
said Nazri Khan to Bernama.

Meanwhile, Bank Negara Malaysia’s (BNM) Governor, Datuk Muhammad Ibrahim,
said on Friday, the measures taken by the central bank and the Financial Market
Committee last December to stabilise the ringgit were expected to show their
full impact by mid-2017.

“Among the measures taken were to allow exporters to retain only up to 25
per cent of export proceeds in foreign currency and the rest in ringgit.

“Other measures include allowing residents, including resident fund
managers, to freely and actively hedge their US dollar and Chinese renminbi with
an exposure of up to a limit of RM6 million per client per bank,” said Muhammad.

He also said BNM would introduce new measures to further strengthen the
local note, if necessary.

For the week just-ended, the ringgit was traded higher at 4.4600/4640
against the greenback compared with last Friday’s 4.4710/4740.

It rose against the British pound to 5.4439/4497 from 5.5373/5428
previously.

The local note, however, ended mostly lower against other major
currencies. The ringgit fell against the Singapore dollar to 3.1243/1282 from
3.1176/1213 last Friday and against the yen it eased to 3.8898/8949 from
3.8550/8586 last week.

Against the euro, the local note depreciated to 4.7468/7524 from 4.7388/7438
last Friday.
— BERNAMA

PETALING JAYA: Bank Negara’s measure to compel exporters to convert 75% of their proceeds into ringgit is starting to bear fruit, following lower volatility in the ringgit.

According to central bank statistics, the intraday ringgit movement against the US dollar has averaged around 90 points compared to 228 points in the month of November and a high of 600 points (measured through the difference between the highest and lowest exchange rate in the interbank market during the day).

It said in a statement that liquidity in the domestic foreign exchange (forex) market has also improved, with the daily average volume rising to around US$9bil (RM40.3bil) this month, compared with the monthly average of US$8bil in the previous 11 months of this year. The central bank also said that the volatility associated with the non-deliverable forward (NDF) market has been dampened.

The ringgit had come under tremendous pressure early last month following the US president election victory of Donald Trump as investors sold down emerging-market assets and bought into US equity markets in anticipation of stronger growth and higher inflation from election promises made on infrastructure spending.

In response to the volatility, Bank Negara introduced new measures last month to compel currency traders overseas to stop driving the ringgit lower and demanded that banks sign a commitment to cease trading the ringgit in the offshore NDF market.

In addition, the central bank said it would implement several measures to boost the onshore ringgit trade. Besides the requirement that exporters convert 75% of their proceeds into the ringgit, which allowed them to retain the remainder of the proceeds in foreign currency with onshore banks only, residents can hedge up to a net open position of RM6mil in US dollar and yuan exposure as well as enabling investors to hedge their forex exposure up to 25% of ringgit-denominated assets.

Bank Negara’s definition of forex flows comprises the supply and demand from all major participants, including the exporters/importers, and portfolio-related and direct investments.

“As the demand and supply of the US dollar/ringgit realigned, the onshore forex market will further stabilise and lead to a better cost of hedging and facilitate businesses in managing their forex risks,” it said.

According to Bank Negara, the market has responded positively to the fund manager hedging framework which will allow registered fund managers to actively manage up to 25% of their invested portfolio.

It noted that to date, 10 fund managers, consisting of both residents and non-residents, have registered with Bank Negara with a total asset under management eligible under the framework of RM41.8bil.

“Fund managers have started to utilise this flexibility. In the secondary bond market, there continues to be two-way flows from both resident and non-resident investors with an average bid-offer spread of three basis points for benchmark securities,” Bank Negara said.

It pointed out that trading activities remained robust, with an average daily trading volume of RM4.5bil and a month-to-date volume of RM52.8bil.

Resident companies recorded net trade inflows under goods in excess of RM2bil in December 2016 compared with the cumulative net outflows under goods from January to November 2016.

In addition to maintaining 25% of export proceeds in foreign currencies, exporters were allowed to reconvert their export proceeds to meet up to six-month forward projections of their loan and import obligations.

December data indicated that around 57% of the proceeds were reconverted for this purpose, Bank Negara said, adding that the remaining proceeds in ringgit would enjoy a return of 3.25%.

Economists believe that the measures that have been taken will eventually increase the forex reserves and provide a buffer against speculative trades in the ringgit with the requirement to convert 75% of proceeds into the ringgit to offset the outflow from portfolio funds.

PUTRAJAYA – Prime Minister Datuk Seri Najib Tun Razak said today the performance of the ringgit, which is said to have dropped slightly of late compared to the United States dollar, is not as bad as claimed by certain quarters.

Najib, who is also Finance Minister, said he had talked to Bank Negara Malaysia Governor Datuk Muhammad Ibrahim on the performance of the ringgit.

He said based on the international monetary performance chart, including ringgit, it was found that there were weaker currencies impacted by external effects.

“There are other currencies whose performances are worse than the ringgit. There are also currencies which are performing better. We sit in the middle.

“And if we look in terms of a basket of currencies, we have not dropped much, only with the US dollar. So, this is an external effect which is beyond our control,” he said at the special question and answer session programme for the 2016 UMNO General Assembly here, today.

The one-hour programme was hosted by Hamdan Ahmir and participated by Utusan Malaysia editor Datuk Zulkefli Hamzah and RTM television personality Sayed Munawar Sayed Mohd Mustar.

Najib, who is also UMNO president, reminded the people not to be confused
with the effect in the drop of the ringgit since it was beyond control.
He also explained that the hike in the interest rate in the United States and certain policies, for example, brought certain implications not only to the world but also Malaysia. – BERNAMA

SINGAPORE – At least four money changers at Change Alley ran out of the Malaysian currency yesterday as people stocked up on the plunging ringgit.

One money changer, who wanted to be known only as Mr Bill, said he was cleaned out within a few hours of opening because he underestimated demand.

Even though the rates on offer yesterday were down on last week, there was still strong demand for the currency. Money changers were offering between 3.01 and 3.03 to one Singdollar – below the 3.05 up for grabs last week.

The volatile currency has been on a rollercoaster ride for months, buffeted first by the commodities downturn and now by fears that Malaysia will suffer badly if United States President-elect Donald Trump follows through on his anti- trade rhetoric once he assumes the top job in January.

Foreign exchange markets are already pricing in more falls. The ringgit was trading at about 3.05 to the Singdollar yesterday, almost at the low point of 3.06 reached in January.

That rate of 3.05 to the Singdollar may filter down to money changers, which would likely spur even more buying by people here, especially those who frequently travel across the Causeway.

Malaysia’s ringgit fell more than 1 per cent to a near 10-month low on Monday (Nov 14).

One customer, who wanted to be known only as Madam Saiedah, said she travels to Johor Baru twice a month for shopping. The 30-year-old administrator said her frequent visits prompted her to change “a small amount” yesterday, even though she did not think the rate was that good. Others at money changers said they were there to browse and holding off on buying.

Foreign exchange experts said that there is more volatility ahead for the Malaysian currency.

Mr Nizam Idris, head of forex strategy at Macquarie Bank, said he had earlier forecast that the ringgit could weaken further to hit 3.15 against the Singdollar in the first quarter of next year. He added that he now thinks the ringgit could hit that level earlier, given the political developments in the US.

Mr Heng Koon How, senior investment strategist at Credit Suisse, noted that many Asian currencies have weakened, but the pressure on the ringgit is more intense.

“Malaysia’s foreign exchange reserves have diminished, from about US$120 billion (S$170 billion) at the end of 2014 to about US$98 billion now,” he said.

“This is contrary to the rest of Asia, where most central banks have had strong growth in their reserves. As such, the Malaysian authorities will be less able to mitigate any excessive weakness in the ringgit.” The Straits Times Singapore.

KUALA LUMPUR – The ringgit is expected to rebound to the 4.10 level against the
US dollar next week, driven by optimism ahead of Budget 2017 tabling.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr
Nazri Khan Adam Khan said the budget was expected to provide attractive measures
to boost the economy, as well as attract foreign investments.

“Ringgit trading next week will be influenced (largely by expectations) in
anticipation of the budget outcomes,” he told Bernama.

The budget will be tabled by Prime Minister Datuk Seri Najib Tun Razak on
Friday.

On a Friday-to-Friday basis, the local note weakened against the greenback
to 4.1980/2050 from 4.1535/1585 following the release of the Bank Negara data
which showed heavy sell-off of Malaysian bond by foreign investors in September.

The ringgit also ended lower against a basket of currencies.

It depreciated against the Singapore dollar to 3.0247/0302 from 3.0214/0252
last Friday and eased against the yen to 4.0230/0301 from 3.9999/9066.

The ringgit weakened against the British pound to 5.1249/1339 against the
previous week’s 5.1142/1220 and declined against the euro to 4.6245/6331 from
4.6199/6267. — BERNAMA