Analysts: Malaysian Ringgit To Continue Rally, End Last Year's Punishment

KUALA LUMPUR, April 1 (Bernama) -- The Malaysia's currency of ringgit is on track to continue its bullish momentum against the US dollar further, and is set to test the 3.80 peg level in the near term. The local note maintained its uptrend versus the US dollar to close at 3.897 today, hitting its highest level in seven months, on continued support from investors. The local note settled at 3.8970/8070 versus the greenback from 3.9385/9455 on Wednesday. FXTM Vice President of Corporate Development & Chief Market Analyst Jameel Ahmad was reported as saying that the ringgit is now moving up and recovering to its steep and traumatic losses in the past year. He said among the factors that contributed to the ringgit rally was the improvement in oil prices which is now above US$35 per barrel. He said it seemed like oil prices were going to be traded at between US$35 per barrel and US$44 per barrel, creating an optimism and more positively for Malaysia, which is an oil exporting country. "It looks like the ringgit punishment may be over," he said, adding that this was expected to improve the Malaysian economy and increase market sentiment. Meanwhile, FXTM Research Analyst Lukman Otunuga said US Federal Reserve (Fed) chair Janet Yellen's heavily dovish comments, which rapidly extinguished the inflated expectations over US rate rise in April, unexpectedly uplifted the global sentiment during this trading week. "Her cautious tone towards the Fed's implementation of future rate increases overshadowed the hawkish views of other Fed officials, while providing the clarity which investors had long sought," he said. Other factors that boosted the local currency are tax increases, spending cuts and 1Malaysia Development Bhd's sale of its energy assets and repayment of RM6 billion (US$1.5 billion) in debts in weeks. --BERNAMA