Ringgit likely to trade lower next week

KUALA LUMPUR: The ringgit is expected to trade lower next week to reach 4.30 against the US dollar on heightened anticipation that interest rates may be increased in December, said an analyst.

FXTM Vice-President for Market Research Jameel Ahmad said market reaction, in the aftermath of Donald Trump winning in the US presidential election, has encouraged optimism that the US Federal Reserve could still raise US interest rates next month.

"Almost everyone is in complete surprise at how financial markets have behaved around the globe over the past few days.

"It appears that the only accurate prediction that has been made is that Trump winning the US election would result in punishment for emerging market currencies," he told Bernama.

Jameel added that the ringgit could breach the 4.30-level against the US dollar should the emerging currencies sell-off accelerate.

According to wire reports, the ringgit's one-month non-deliverable forward (NDF) or offshore rates fell to 4.5280 versus the US dollar on Friday.

Bank Negara Malaysia, in a statement, said it would take measures to ensure that the foreign exchange market does not price the ringgit excessively and out of sync, while providing the necessary liquidity.

Affin Hwang Asset Management said the ringgit and other emerging currencies would continue to play hostage towards the greenback's strength, moving forward, as the market monitored and digested Trump's speeches and actions.

For the week just-ended, the ringgit was lower at 4.2800/2900 against the greenback from 4.1970/1020 last Friday, but ended mixed against other major currencies.

The ringgit appreciated against the yen to 4.0199/0308 last Friday from 4.0759/0820 but declined against the Singapore dollar to 3.0372/0458 from 3.0288/0333 last week.

The local unit rose to 4.6519/6632 against the euro from last Friday's 4.6583/6642 but weakened against the British pound to 5.4168/4299 from 5.2370/2445 previously. — Bernama