Sunday, March 7, 2010

Ringgit expected to test 3.35 level

The ringgit is seen to be on the bright side next week following Bank Negara Malaysia's move to increase the overnight policy rate (OPR) to 2.25 per cent.

The local currency, which was on the uptrend in the week just ended, will repeat its performance to test the 3.35 level against the US dollar next week, RHB Bank's forex dealer Badeeudin Mohd Abu Bakar told Bernama.

More bullish economic prospects have been forecast for Malaysia this year and this will push the ringgit further up, Badeeudin said.

"The strengthening of Asian currencies will also lend some support to our currency," he said.

Agreeing with the assessment, RAM Holdings Bhd's chief economist Dr Yeah Kim Leng said the ringgit is likely to strengthen further this year to hit the 3.2 to 3.3 level against the US dollar in line with other Asian currencies.

"The uptrend will continue because of the recent euro and pound weaknesses. Asian currencies will appreciate faster than other currencies," he said.

As for other factors, Badeeudin said the volatile US market may also have an effect on the performance of the US dollar against other major currencies next week.

The greenback was described as subdued on late Friday as traders awaited the release of key US employment data.

During the week just ended, the ringgit closed higher on continuing buying momentum to finish at 3.3620/3660 against the US dollar from 3.4045/4075 last Thursday.

Against other major currencies, the local currency appreciated against the Singapore dollar to 2.3980/4031 from 2.4132/4174 last week and also against the Japanese yen to 3.7653/7719 from 3.8048/8102 previously.

The ringgit strengthened against the pound sterling to 5.0538/0618 from 5.2126/2182 last week and also against the euro to 4.5706/5704 from 4.5916/5981 previously. -- Bernama

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