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FOREX: Ringgit Likely To Be Firmer Against U.S. Dollar Next Week |
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Written by Administrator
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Sunday, 23 September 2007 |
The ringgit is likely to be firmer against the U.S. dollar next week as market participants expect the greenback to weaken further following the larger than expected cut in U.S. interest rate this week, dealers said.
The U.S. Federal Reserve slashed the federal funds rate by 50 basis points to 4.75 percent last Tuesday.
Dealers said the narrowing interest rate spreads for the U.S. dollar led to sharp depreciation of the greenback against the euro, yen, Canadian dollar, Australian dollar and New Zealand dollar this week.
KUALA LUMPUR, Sept 22 (Bernama) -- The ringgit is likely to be firmer against the U.S. dollar next week as market participants expect the greenback to weaken further following the larger than expected cut in U.S. interest rate this week, dealers said.
The U.S. Federal Reserve slashed the federal funds rate by 50 basis points to 4.75 percent last Tuesday.
Dealers said the narrowing interest rate spreads for the U.S. dollar led to sharp depreciation of the greenback against the euro, yen, Canadian dollar, Australian dollar and New Zealand dollar this week.
The decline in the U.S. dollar was exacerbated by weak U.S employment data released on Thursday, they added.
A dealer noted that fund managers are swapping their investment to the safer Asian markets amid the uncertainty of the U.S. economy due to the subprime mortgage woes.
"This is expected to provide a positive impact on the ringgit and encourage more ringgit buying among investors," he added.
The ringgit is expected to be traded between 3.40 and 3.45 against the U.S. dollar next week.
During the week just ended, the local unit was firmer against the greenback as players liquidated their U.S. dollar position.
The ringgit's uptrend was also supported by Second Finance Minister Tan Sri Nor Mohamed Yakcop's remark that the domestic interest rate would remain stable at 3.50 percent.
The ringgit ended the week higher against the greenback at 3.4430/4470 compared with last week's quote of 3.4800/4850.
Meanwhile, local unit increased against the Singapore dollar at 2.2863/2899 as against last week's closing of 2.3016/3064 and strengthened against the Japanese yen at 2.9953/9992 from 3.0242/0276 previously.
The ringgit also appreciated against the pound sterling at 6.9352/9443 from 7.0202/0310 last week but decreased against the euro at 4.8450/8517 as against 4.8285/8361 previously.
Source : BERNAMA |
