FXTM sees ringgit in 4.15-4.30 range by year-end

November 1, 2017 | By | Reply More

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KUALA LUMPUR: The ringgit is likely to range between RM4.15 and RM4.30 against the greenback at the end of 2017 and the lack of progress in the execution of Trump’s policies is likely to spell well for the local unit.

At 12pm, the ringgit traded at 4.2335 against US dollar. The ringgit, which appeared as the fifth strongest currency in the region, has appreciated about 6% against the US dollar year to date.

FXTM global head of currency strategy and market research Jameel Ahmad said at a media briefing on the market outlook for 2018 that as US President Donald Trump’s campaign promises such as tax reforms, protectionism and others have yet to fully materialise, hence it is unlikely to impact the ringgit further.

“For as long as this is delayed, it will be positive for the ringgit and regional currencies,” he explained.

Jameel highlighted that these policies and promises to boost growth, will in fact require low interest rates in contrary to the US Fed’s indication of further rate hikes.

On top of that, he said the announcement on the next Fed chairperson who will be succeeding Janet Yellen, expected tomorrow, will also play a role.

“If Trump does nominates somebody who is much more cautious than Yellen, much more anxious and less enthusiastic of raising interest rates, the financial markets and all the currencies that are trading against the US dollar including the Malaysian ringgit will find an opportunity to strengthen,” he added.

With other central banks also mulling interest rate hikes, it takes away the pull factor to buy the dollar, as the Fed is no longer the only ones talking about rate hikes.

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