Ringgit Climbs Further Against US Dollar In Late Trade

KUALA LUMPUR -- The ringgit climbed further against the US dollar in late session Wednesday on brisk commercial demand for the local currency, dealers said.

At 5.00pm, the local unit was traded at 3.4195/4210 versus the greenback, stronger than Tuesday's closing of 3.4210/4230.

"The ringgit restored its steady gains. Bank Negara Malaysia heavily supported the ringgit buying. We have seen strong intervention at the 3.4205 level today," said one of the dealers from a local brokerage.

He said the ringgit's gain was also supported by weaknesses of the greenback in most overseas markets following the weaker-than expected US housing data for March.

In late Tokyo trade today, the US dollar was quoted lower at 118.48 against the Japanese yen compared with 118.62 on Tuesday.

The dealers said that most forex players maintained a firm near-term outlook, expecting more upside for the ringgit on the back of a growing current account surplus and capital inflows.

In the late session today, the ringgit was mostly lower against other major currencies.

It fell against the Singapore dollar at 2.2611/2636 from Tuesday's 2.2569/2596 but strengthened against the yen at 2.8844/8867 from 2.8845/8871 previously.

Against the British pound, the ringgit slipped to 6.8540/8588 from 6.8324/8368 yesterday and it declined against the euro at 4.6649/6680 from 4.6406/6436 previously.

FOREX: Ringgit To Climb Further Against The Greenback

The ringgit is expected to climb further against the U.S. dollar next week amid steady commercial demand following the recent government moves aimed at improving the investment climate in the country, analysts said.

The local unit has strengthened to RM3.42 per U.S. dollar, its strongest in almost 10 years, on continued brisk demand by foreign funds in line with the rally in the local stock market.

Year-to-date, it has climbed more than two percent, making it the second-best performing currency after the Thai baht.

The gain was driven by various factors including Bank Negara Malaysia's (BNM) upbeat assessment of the economic outlook, further relaxation of the foreign exchange policy, the Prime Minister's endorsement of the ringgit's strength and speculation that BNM will allow the ringgit to be traded offshore this year.

"There were a lot of positive factors which had contributed to the ringgit's rise and we believe that the upward trend will continue," one analyst said.

The analyst said foreign funds are also expected to increase their ringgit position in view of the country's strong economic fundamentals.

The Malaysian Institute of Economic Research (MIER) had said this week that the ringgit will continue to strengthen and is likely to reach RM3.35 to the U.S. dollar if offshore trading on the local unit is allowed.

Meanwhile, CIMB Investment Bank Bhd has forecast that the ringgit will reach RM3.40 by year-end and RM3.30 by the end of 2008 as BNM tolerates its appreciation.

During the week, the local currency was traded higher against the greenback on the back of follow-through ringgit buying by foreign funds.

It started the week on a steady note, trading at RM3.44, and maintained its gains until Friday to close the week at RM3.42.

On a week-to-week basis, the ringgit was firmer against the greenback at 3.4200/4220 from 3.4410/4430.

The local unit was also mostly higher against other major currencies.

It advanced against the Singapore dollar at 2.2631/2661 from 2.2683/2704 and perked against the yen at 2.8817/8841 from 2.9065/9089.

However, against the British pound, the local unit depreciated to 6.8438/8488 from 6.8321/8371. Against the euro it went up to 4.6519/6549 from 4.6533/6570.


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