Ringgit likely to depreciate this week, says Kenanga Investment

by BERNAMA / pic by TMR FILE

THE ringgit will likely be heading for a second straight weekly fall this week amid a volatile oil market outlook, said Kenanga Investment Bank Bhd.

In a note, the research firm said the lingering concerns over global oil demand could drag crude oil prices lower, potentially pushing ringgit to trade lower this week.

“Nevertheless, further US dollar weakness ahead of the Federal Open Market Committee’s (FOMC) policy meeting and rising global COVID-19 cases could offset the ringgit downward pressure,” it said.

Kenanga expects the local currency to depreciate by 0.18 per cent to 4.159 against the greenback from its closing price of 4.152 on last Friday.

“The short-term technical outlook shows that the US dollar may test the pair’s upside at 4.164 and potentially hit 4.177 level.

“Conversely, a potential downside could tilt the pair towards 4.145 and 4.139 support level,” it added.

The ringgit opened slightly lower this morning, reversing its recent gains, on the back of cautious sentiment ahead of the FOMC meeting that kept investors to hold the greenback.

At 9 am, the local currency was quoted at 4.1520/1590 versus the US dollar from 4.1510/1550 at Friday’s close.

The FOMC rate decision is scheduled on Wednesday.