Ringgit likely to test 3.50 level

Published: 2009/05/09

THE ringgit is expected to test the 3.50 level against the US dollar next week, taking advantage of the strong commercial demand for it amid a weaker greenback, dealers said. They said the local unit gained positive momentum due to an improvement in investor confidence over the global economic recovery as well as the uptrend on local bourse.

On Friday, the underlying Kuala Lumpur Composite Index rose 3.31 points to 1,026.78. "We think the ringgit will continue appreciating against the dollar next week," a dealer said, adding that there will be another round of sell-off on the greenback if the United States payroll data showed negative result.

She said market players were likely to shift to other currencies where interest rates are expected to trend higher. "We expect further selling-through of dollar in the near-term," she added. During the week, the ringgit was stronger against the greenback as well as other major currencies in line with the uptrend performance in the local stock market.

Compared to last week, the ringgit ended stronger against the US dollar at 3.5220/5270 from 3.5570/5620 previously. Against other major currencies, it was higher against the Singapore dollar at 2.3966/3019 from 2.4076/4143 and was also stronger against the Japanese yen at 3.5443/5689 from 3.6422/6496. However, the ringgit was lower against the pound sterling at 5.3355/3448 from 5.2907/2995 but it was higher against the euro at 4.6902/6980 from 4.7379/7460. -- Bernama