Wednesday, June 19, 2024
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Ringgit seen trading at MYR4.38-4.40 against US dollar this week

KUALA LUMPUR (THE STAR) – The ringgit is expected to move range-bound between MYR4.38 and MYR4.40 against the US dollar this week as investors mull cutting their long US dollar exposure in G10 currencies due to rising worries over a possible global recession, said an analyst.

The G10 is a grouping of industrialised countries, whose members include the United States (US), the United Kingdom, Japan, and France.

SPI Asset Management managing partner Stephen Innes said the cutting back on long US dollar positions would likely filter through to Asian foreign exchange (FX) and strengthen the ringgit against the greenback.

He said traders are starting to price in a recession, so the US growth and economic data will continue to be under the market glare.

“Since interest rate traders are now pricing in a recession, interest rates along the US Federal Reserve curve, namely for late 2023 and 2024, are starting to reprice lower and the market has backed off on any thought of a 75-basis point US rate hike in July,” he told Bernama.

“This will be less favourable for the US dollar. I think that could also cause the US dollar-ringgit to move lower on broader US dollar weakness. So the ringgit could strengthen,” he also said.