KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the selloff pressure eases barring any major catalyst, according to FXTM market analyst Han Tan.
As at 12pm, the ringgit was trading lower at 4.1325 against the greenback compared with yesterday’s close of 4.1280.
The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was further aggravated by the speculation that Malaysian bonds will be dropped from the FTSE World Government Bond Index.
Tan said the market is currently focused more on the external factors, letting the external risk to dictate the performance of currencies and paying less attention to the internal economic data.
According to the International Monetary Fund’s (IMF) Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.
