Ringgit to trade range-bound with upside bias this week
Published on: Monday, October 19, 2020
By: Bernama
.jpg "Ringgit to trade range-bound with upside bias this week")
Kuala Lumpur: The ringgit is expected to trade range-bound against the US dollar this week with a potential upside bias brought on by external developments, said a dealer.FXTM market analyst Han Tan said any surprise breakthrough in negotiations surrounding a fresh round of US fiscal stimulus would be a huge boost for risk appetite.
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“However, such a scenario remains unlikely at this juncture, given that the US elections are just a couple of weeks away.
“Markets are set to pay little heed to the upcoming debate between US President Donald Trump and Democratic challenger, Joe Biden, especially if it turns out to be yet another fiasco like the previous one.
Still, a shocking statement during the debate could yet jolt markets, even as markets have begun pricing in potential election outcomes,” he told Bernama.
Han said China’s data dump on Monday could well set the tone for Asian markets early this week.
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“Positive surprises in the third-quarter gross domestic product, industrial production, and retail sales in the world’s second-largest economy may translate into gains for regional currencies,” he said.
Meanwhile, the ringgit/US dollar pair which put in a stable performance in the week just ended, did not stray much from the 4.14-4.15 range, with the currency pair being one of the most stable within the dollar/Asia complex in recent weeks, he said.
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Back home, Malaysia’s September consumer price index, slated to be announced on Wednesday, is expected to come in at minus 1.3 per cent, which would mark the seventh consecutive month of contraction.
“Such a trend could lower the bar for Bank Negara Malaysia to ease the benchmark interest rate further in early November,” said Han.
On a Friday-to-Friday basis, the ringgit eased against the US dollar to 4.1470/1520 from 4.1320/1400 in the previous week.Stay up-to-date by following Daily Express’s Telegram channel.
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