THE ringgit is poised to strengthen as the US Federal Reserve has left a dovish footprint post the Federal Open Market Committee’s meeting, which should see the US dollar continues to weaken, said an analyst.
However, Axi chief global market strategist Stephen Innes said as commodities are strengthening, particularly for the higher oil prices, they provide a double whammy of support for the local unit.
“Year-end liquidity conditions are likely to take their toll as the foreign exchange market now needs to borrow back all this US dollar it has sold, so I would expect the pace of appreciation to slow next week.
“The future looks very bright for the ringgit as the US stimulus, and a Brexit deal will most certainly push commodity prices higher and risk sentiment to improve. So, I would expect to see the ringgit trade on a stronger tone for sure,” he told Bernama.
On Friday-to-Friday basis, the ringgit was higher against the US dollar at 4.0375/0415 against the US dollar from 4.0500/0550 in the previous week.
The local currency was also traded easier against other major currencies.
It fell against the Singapore dollar to 3.0389/0428 on Friday from 3.0301/0332 a week earlier and dropped against the British pound to 5.4474/4540 from 5.3537/3585.
The ringgit eased versus the euro to 4.9451/9512 from 4.9074/9122 and depreciated vis-a-vis the Japanese yen to 3.8983/8029 from 3.8927/8964 on Friday last week. – Dec 20, 2020.
