Ringgit expected to remain weak next week

Ringgit expected to remain weak next week
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KUALA LUMPUR (Nov 27): The ringgit is projected to stay weak next week as increasing Covid-19 cases with a new variant and the likelihood of the US Federal Reserve (Fed) to accelerate the tapering pace are set to provide a strong support for the US dollar.

The sell-off in the domestic currency market continued for the ninth straight day on Friday (Nov 26).

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said he expects sentiment for next week will not be much different.

He said key data points such as the US Institute for Supply Management Indices, non-farm payrolls and the jobless rate will be closely monitored.

On Dec 1, the Fed will release the latest US Beige Book Report on current economic conditions. 

"So far, the US economy has been cruising quite well. This could motivate the Fed officials to consider removing the monetary policy accommodation as an immediate priority.

"Also, we shall see how the Organization of the Petroleum Exporting Countries (OPEC) and its allies decide on the production quota, especially in the context of higher supplies following the release of petroleum reserves from key countries such as the US and China," he said.

It was also reported that a new Covid-19 variant was found in South Africa. The heavily mutated variant is known as B.1.1.529. 

Hence, he said, any movement would be in a tight range for the ringgit.

On a weekly basis, the local note was weaker versus the greenback at  4.2370/2400 from 4.1810/1850 at Friday’s close.

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

The ringgit slipped against the Singapore dollar to 3.0893/0920 from 3.0702/0736 a week earlier and depreciated against the euro to 4.7713/7747 from 4.7249/7295 previously.

It eased against the Japanese yen to 3.7131/7160 from 3.6675/6714 a week before, and fell vis-a-vis the British pound to 5.6403/6443 from 5.6147/6200 previously.