KUALA LUMPUR, March 14 (Bernama) -- The ringgit is expected to be traded moderately and driven by external factors amid heightened concerns over COVID-19 which will curb investors’ risk appetite, dealers said.
FXTM market analyst Han Tan said with tier-1 economic releases missing from the domestic calendar for the week ahead, extraneous factors are set to hold primary sway over the ringgit’s performance.
“With the dollar versus ringgit looking slightly overbought, some moderation may be seen in the week ahead, although the currency pair is expected to remain supported above the RM4.20 per dollar psychological level, barring a sudden bout of risk-on sentiment.
“However, another wave of risk aversion, coupled with further declines in oil prices, may sweep dollar-ringgit above the psychologically-important RM4.30 per dollar for the first time since July 2017,” he told Bernama today.
Han said the market demand for dollar assets during such a period of heightened risk aversion is predicated by the US economic outlook, which is deemed to be in a better state compared to its developed peers.
“The resolute dollar is expected to limit the upside for Asian currencies until risk sentiment can break through the fear surrounding COVID-19,” he added.
For the week just ended, the ringgit ended lower against the US dollar at 4.2750/2800 compared with 4.1700/1750 on Friday of the previous week.
On a Friday-to-Friday basis, the local currency depreciated broadly against a basket of currencies.
It declined against the Singapore dollar to 3.0360/0406 against 3.0222/0267 a week earlier and decreased to 4.0228/0279 from 3.9643/9701 versus the Japanese yen.
The local note fell against the euro to 4.7730/7790 against 4.7088/7161, but rose vis-a-vis the British pound to 5.3822/3902 from 5.4156/4237 previously.
TAGS: Ringgit, US dollar, COVID-19, Bank Negara Malaysia