Ringgit expected to trade with slight appreciation bias next week

Ringgit expected to trade with slight appreciation bias next week
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KUALA LUMPUR (Oct 2): The ringgit is expected to remain in a tight range with a slight appreciation bias next week as technical indicator suggests that the US Dollar Index is in the midst of an overbought position.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit was likely to trade between 4.17 and 4.18 next week against the US dollar.

"Next week, investors will be closely monitoring the Organisation of the Petroleum Exporting Countries and allies (OPEC+) ministerial meeting as well as key data point from the United States such as the nonfarm payrolls for September," he told Bernama.

Meanwhile, Kenanga Investment Bank Bhd noted the ringgit may gather some strength and slightly appreciate against the greenback amid positive sentiment surrounding the reopening of the economy.

"This is despite the strengthening of US dollar due to the global risk-off mode on the back of the rising inflation outlook, US Federal Reserve's hawkish tone and US fiscal uncertainty," it said.

The government of Wednesday announced that more states would move towards the next phase of National Recovery Plan, with the Klang Valley entering the Phase 3 beginning Friday, that led to reopening of more economic sectors.

During the week, the ringgit was mostly higher versus the greenback following an improved sentiment after the tabling of 12th Malaysia Plan in Parliament on Monday.

On a weekly basis, the ringgit strengthened to 4.1770/1810 vis-a-vis the greenback on Friday from 4.1865/1890 a week earlier.

The local unit was also traded higher against other major currencies compared to the previous Friday.

It improved against the Singapore dollar at 3.0756/0788 from 3.0981/1004 a week before and rose against the British pound to 5.6373/6427 from 5.7359/7393.

The local note also performed better against the euro to 4.8361/8408 from 4.9120/9150 a week earlier and appreciated against the Japanese yen to 3.7580/7616 from 3.7925/7951 previously.