Ringgit to stabilise, trade between 4.0900-4.1200 next week

KUALA LUMPUR: The ringgit is expected to stabilise and trade in a range of between 4.0900 and 4.1200 against the US dollar next week after rallying on the back of positive local sentiment, a dealer said.
MIDF Amanah Investment Bank Bhd Chief Economist Dr Kamaruddin Mohd Nor said the ringgit rose 8.4% year-to-date against the US dollar on expectation that Bank Negara Malaysia (BNM) would increase the overnight policy rate (OPR) in the first quarter of 2018 following the strong 6.2% economic growth in the third quarter of this year.
The strengthening ringgit was also contributed by renewed interest for bonds, as well as firm crude oil prices, he said
"The ringgit is expected to stabilise after a strong increase last week as there will be no major economic data to be released next week to drive the market.
"Oct's Consumer Price Index at 3.7% as announced on Friday, if supported by other positive macro economic data, would also reinforce the possibility that BNM would be increasing its OPR in the near-term which in-turn would lent support to the local currency," he told Bernama.
Kamaruddin said the ringgit's strength was also contributed by the softening greenback after outgoing US Federal Reserve (Fed) Chair Janet Yellen's cautious remarks prompted market uncertainties on the US interest rates policy next year as policymakers were concerned over the inflation outlook.
Meanwhile, Hong Leong Research said the ringgit rallied 1.63% week-on-week to 4.1080 against the US dollar and advanced against eight of the Group of 10 currencies.
"We suspect ringgit rally has run its course after five consecutive days of gains and could be in for a pullback. The ringgit is slightly bearish against greenback next week, more so if the greenback gets a boost from US data," it added.
On a Friday-to-Friday basis, the ringgit strengthened 445 basis points to 4.1155/1185 against the greenback from 4.1600/1630 last Friday.
Against other major currencies, the local unit rose against the Singapore dollar to 3.0553/0584 from 3.0656/0685, gained against the British pound to 5.4839/4895 from 5.5120/5168, appreciated versus the Japanese yen to 3.6927/6964 from 3.6961/6998, and improved vis-a-vis the euro to 4.8835/8887 from 4.9055/9103. — Bernama