Ringgit Likely To Trade At Current Level Next Week

KUALA LUMPUR, July 16 (Bernama) -- The ringgit is likely to trade around current level and could be slightly lower versus the US dollar next week, influenced mostly by external and internal market sentiments, dealers said. A dealer said the local note might be lower due to profit-taking. "Profit-taking may set in as the currency hit a 10-week high versus the US dollar this week as government bond prices extended gains after Bank Negara Malaysia's surprise interest rate cut on Wednesday," the dealer said. The central bank in a surprise move has slashed the overnight policy rate (OPR) by 25 basis points to 3.00 per cent, the first since 2009, to ensure the economy remains on a strong trajectory. Meanwhile, Affin Hwang Investment Bank Vice-President and Head of Retail Research Datuk Dr Nazri Khan Adam Khan said although the cut would not have any adverse impact on the local currency, it would still benefit the currency provided there were foreign investments coming into the country. "We see the OPR cut as a pre-emptive move to ensure that inflation remains under control and the economy remains on a steady growth path. "This is confirmed by the Malaysian bonds three-year yield which dropped to its lowest level since 2009, and the stronger ringgit which hit a 10-week high versus greenback," he said. Nazri Khan, however, said that Affin Hwang remained confident that the ringgit's fair value would be between 3.95 and 4.00 this year. For the week just-ended, the ringgit was traded mostly higher before BNM's two-day monetary policy meeting which ended on Wednesday. It continued its bullish momentum even after the OPR cut was announced. On a Friday-to-Friday basis, the local unit was higher at 3.9450/9500 against the US dollar from 4.0300/0350 in the previous week. Against other currencies, the ringgit ended mostly higher. The ringgit rose against the Singapore dollar to 2.9335/9381 from 2.9885/9931, strengthened versus the yen to 3.7242/7306 from 4.0052/0121 and increased vis-a-vis the euro to 4.3935/3007 from 4.4624/4688 previously. However, it depreciated against the British pound to 5.2918/2009 from 5.2128/2201. The ringgit was traded mostly lower against the British Pound as the latter has improved following United Kingdom's announcement on the appointment of Theresa May as Prime Minister. -- BERNAMA