Ringgit May Breach 3.95 Next Week On West Asia Ceasefire Optimism - Economists

By Abdul Hamid A Rahman

KUALA LUMPUR, April 11 (Bernama) -- The ringgit is expected to maintain its upward trajectory next week and could breach the 3.95 level amid cautious optimism over developments in West Asia, said economists.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said markets remained fixated on developments in Iran, with the ongoing ceasefire and the potential reopening of the Strait of Hormuz continuing to influence sentiment.

“Markets will also be watching a series of speeches by United States Federal Reserve officials for further clues on the impact of the conflict, alongside recent mixed economic data,” he told Bernama.

Meanwhile, Kenanga Investment Bank Bhd expects markets to remain cautious, refraining from taking aggressive long positions on the ringgit until the Islamabad peace talks between the US and Iran show tangible progress.

“The ceasefire appears tenuous, while Israeli opposition to renewed diplomacy complicates efforts towards a broader agreement. Continued military friction in Lebanon also risks re-escalation, keeping the Strait of Hormuz risk premium elevated.

“We expect the ringgit to trade within the 4.00-4.05 range, as geopolitical scepticism outweighs temporary relief. A move towards 3.95 is possible if de-escalation holds,” it said in a note on Friday.

On a week-on-week basis, the ringgit swept higher against major and ASEAN currencies, supported by sustained buying interest amid cautious optimism over developments in West Asia.

The ringgit appreciated against the US dollar at 3.9625/9680 on Friday, compared with 4.0295/0350 at the end of the previous trading week.

The local note also traded higher against a basket of major currencies this week.

It rose against the British pound to 5.3248/3322 from 5.3326/3399, enhanced versus the Japanese yen to 2.4882/4918 from 2.5247/5285, and increased against the euro to 4.6401/6465 from 4.6513/6576 a week ago.

The ringgit was also traded higher against its ASEAN peers.

It appreciated versus the Singapore dollar to 3.1093/1139 from 3.1341/1389, strengthened against the Thai baht to 12.3289/3525 from 12.3585/3841, expanded versus the Indonesian rupiah to 231.6/232.0 from 237.2/237.7, and elevated against the Philippine peso to 6.60/6.62 from 6.68/6.71, previously.

-- BERNAMA