MALAYSIA: RINGGIT TO HIT 3.95 VERSUS US DOLLAR IN Q1 2018

KUALA LUMPUR, Malaysia — The ringgit is expected to test the 3.95 level against the US dollar in the first quarter of the year (Q1 2018) , tracking the uptrend in other regional currencies mainly due the weakness of the greenback, said research houses.

In a statement today, Kenanga Investment Bank Bhd said the local currency was also partly supported by strong fundamentals and positive sentiment.

“Notwithstanding the recent strength seen in the ringgit, the local currency is expected to experience volatility in the face of widely expected US Federal Reserve’s (Fed) tightening of at least three 25 basis-point rate hikes for the year.

“Furthermore, the current US dollar weakness might dissipate as the new US tax reform proceeds and provides a boost to the country’s economy and currency, therefore, implying a softer ringgit against the dollar,” it said.

Hence, the research house forecasts the ringgit might retrace back to around the the 4.10-level versus the greenback after testing the 3.95 level in the Q1 2018.

Echoing Kenanga’s view, RHB Research Institute Sdn Bhd said the local note was expected to continue appreciating to 3.95 against the US dollar by end-2018 amid the weakness of the greenback, along with a surplus in the current account.

“Nevertheless, volatility in the local currency could still persist in the near term, given that the US Fed is still guiding three rate hikes and would continue to reduce its balance sheet this year.

“Besides, foreign holdings of fixed income instruments are still sizeable in the country and crude oil prices remain volatile,” it added.

Source: NAM NEWS NETWORK