Sunday, November 25, 2007

Ringgit to strengthen next week


The ringgit is likely to rise against the US dollar next week amid concerns over the US subprime crisis and volatility in global stock markets, dealers said.

One of the dealers said the ringgit is likely to appreciate, moving between 3.33 and 3.35 to the dollar next week on negative news over the US market which have caused investors to remain on the sidelines.

“Investors may want to gain more profits from the dollar’s weakness because they are still not confident about the US situation,” she said.

According to the dealer, the local currency market is expected to remain positive on the possibility that the US Federal Reserve will cut interest rates again next month.

“A further interest rate cut may save the US economy but it will also further weaken its currency as investors turn to higher yielding instruments. So, it’s good news for the ringgit,” she said.

Another dealer said the movement of the local unit will also depend on the local stock market performance as funds coming mostly from foreigners will impact the ringgit.

On a week-to-week basis, the ringgit was firmer against US dollar at 3.3580/3630 compared with 3.3770/3800 last Friday.

The local unit depreciated against the Singapore dollar at 2.3282/3333 from last Friday’s close of 2.3245/3283 and also declined against the Japanese yen at 3.1084/1136 from 3.0644/0685.

The ringgit was weaker against the British pound at 6.9326/9439 from 6.8965/9033 and also against the euro at 4.9907/9988 from 4.9297/9355 previously.