KUALA LUMPUR, March 12 ― The ongoing Russia-Ukraine conflict has increased demand for safe haven assets such as the US dollar, while riskier assets, such as the ringgit, are anticipated to stay undervalued.
The US dollar index continued to march higher, rising by 0.21 per cent to 98.712 points yesterday.
Consequently, the dollar-ringgit conversion remained soft at RM4.1940 as the risk-off sentiment has been persistent, said Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
“Next week, the US Federal Open Market Committee (FOMC) meeting will be keenly watched by the market. We shall see whether the US Fed will honour its 25 basis points Fed Funds rate hike as promised.
“We expect the Fed to honour the promise, given that the United States’ February Consumer Price Index has continued to remain higher at 7.9 per cent. So the case for higher policy rate should still be on the table next week,” he told Bernama.
He also said the ringgit should stay within RM4.19 to RM4.20 next week as investors would prefer to stay long in safe haven currencies.
On a weekly basis, the ringgit registered at 4.1940/1975 against the greenback from 4.1760/1795 a week ago.
The local currency also traded higher against other major currencies on a Friday-to-Friday basis.
Against the Japanese yen, it rose to 3.5858/5891 from 3.6178/6211 and went up against the British pound at 5.4828/4874 from 5.5558/5604, but was almost flat versus the euro at 4.5991/6030 from 4.5994/6033.
It depreciated against the Singapore dollar at 3.0802/0832 from 3.0715/0745 a week earlier. ― Bernama
