Ringgit likely to move between 3.8-4.0 versus greenback in 2Q16
Published on: Thursday, April 21, 2016
Kuala Lumpur: The ringgit is likely to move between 3.80 and 4.0 against the US dollar in the second quarter of 2016 on easing worries about US interest rate increase, recovery in commodity prices and the reduction in risk from China to the emerging economies' currencies. The domestic unit stood 3.8660/8720 against greenback as at 5pm on Wednesday.ForexTime Ltd (FXTM) Chief Market Analyst, Jameel Ahmad, said the weakness in the US dollar has helped contribute to the attractiveness of the emerging markets' currencies, with the ringgit as one of them to benefit. "The Malaysian currency has found a platform to rebound. It has slowly moved on to the next phase of its psychological recovery against the US dollar," he told a media conference on the state of the ringgit here Wednesday.
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Jameel pointed out that the possibility of two US interest rate increases in 2016 could be pushed back even further. He added that the West Texas Intermediate crude was expected to move between US$35 and US$44 per barrel in the second quarter and the rebound in the commodity's price was largely technical.The US presidential election in November 2016 has minimal impact on the markets, said Jameel."However, the potential political risks always hold the possibility for market volatility. Keep an eye on it," he added.
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He said gold had performed better-than-expected in 2016, rebounding earlier than anticipated as an extended "risk-off" attitude in the market, global downgrades and US dollar weakness has encouraged gold demand. The Malaysian economic growth remained strong despite concerns on the global economy, said Jameel.
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He added that the recent rebound in momentum for the ringgit had eased pressure on Bank Negara Malaysia to move interest rates higher. Stay up-to-date by following Daily Express’s Telegram channel.
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