Ringgit expected to trade on upward bias this week

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KUALA LUMPUR: The ringgit is expected to trade on an upward bias against the US dollar this week due to apprehension towards the decision to further hike interest rates by the US Federal Reserve (Fed), said an analyst.

Putra Business School economic analyst associate professor Dr Ahmed Razman Abdul Latiff said there would be a possibility of an upward trend of the ringgit strengthening against the US dollar due to apprehension towards the decision to hike interest rates by the Fed.

“However, the rate hike might not become another high increment as anticipated,” he told Bernama, adding that the ringgit is likely to trade within the 4.4600-4.4800 range against the US dollar.

The US economy contracted at an annual rate of 0.6% in the second quarter of this year, compared with a contraction of 0.9% estimated a month ago, according to data released by the US Commerce Department on Aug 25 (Thursday).

For the last week, the ringgit was traded higher against the US dollar, boosted by a rally in the oil market which lifted benchmark Brent crude above the US$100 level.

Meanwhile, traders remained in a cautious mode looking for new guidance from the speech by US Fed chair Jerome Powell at the Jackson Hole Symposium on Aug 26.

On last Friday, the ringgit strengthened against the greenback to 4.4655/4675 compared with 4.4760/4795 a week earlier.

The local note traded stronger against a basket of major currencies.

It surged against the Japanese yen to 3.2619/2636 from 3.2767/2795 previously and improved significantly against the British pound to 5.2831/2855 from 5.3126/3167.

The local unit appreciated against the Singapore dollar at 3.2140/2159 from 3.2225/2254 last week and soared versus the euro to 4.4668/4688 from 4.5069/5104 a week earlier.

Source : The Edge Markets

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