Ringgit likely to trade flat against greenback next week

KUALA LUMPUR: The ringgit is likely to trade in flat mode against the US dollar next week in range-bound trading amid the stronger US economic growth and expectations of gradual interest rate hikes by the Federal Reserve.
An analyst told Bernama that the US economic growth accelerated in the second quarter at the fastest pace since 2014, which will boost buying for the greenback.
It was reported that US gross domestic product growth rose to 4.1%, led by an increase in personal consumption from the first quarter, as well as a surge in exports.
"This number is highly anticipated. However there is nothing to worry as commodity prices are currently higher, which will provide support to the ringgit," he said.
Asked if the Khazanah Nasional Bhd board members' offer to resign would impact the currency, he replied in the negative.
On Thursday, the state fund confirmed news reports that all Members of the Board of Directors including the Managing Director had offered to resign from the Board, to facilitate a smooth and orderly transition under the new government.
Meanwhile, FXTM Global Head of Currency Strategy & Market Research Jameel Ahmad said unless there is a significant US dollar sell-off, the ringgit is exposed to remaining below 4.05 against the dollar next week.
"There are important economic data releases from Malaysia next week, including the latest Manufacturing purchasing managers' index (PMI) and trade balance report.
"Both indicators are seen as providing a critical assessment on how the Malaysian economy is currently performing and I would expect that spectators would be monitoring whether the ongoing global trade war tensions might have any impact on demand for Malaysian goods," he said.
He added that it is unlikely that either economic report would have a meaningful impact on the ringgit unless there is a major surprise with the data, maintaining his view that the local unit would remain below 4.05 and could further drop as far as 4.10 over the coming week.
On a Friday-to-Friday basis, the local note stood at 4.0600/0650 against the greenback from 4.0600/0630 recorded last Friday.
The ringgit was mostly lower against a basket of major currencies.
It fell against the pound to 5.3117/3199 from 5.2861/2904 but rose against the euro to 4.7193/7264 from 4.7315/7366.
The ringgit depreciated against the Singapore dollar to 2.9763/9806 from 2.9687/9718 and weakened against the yen to 3.6508/6562 versus 3.6108/6138. — Bernama