KUALA LUMPUR: The ringgit is expected to be stronger for the remainder of the year, although there will still be some volatility.
The ringgit’s recent uptrend has prompted analysts to be more sanguine about the local currency. They have revised it upwards to nearly 4.10 versus the US dollar by the end of the year.
The ringgit had been steadily appreciating to a near seven-month high against the US dollar on the back of improving economic fundamentals, said analysts.
Kenanga Research expects the ringgit to move within RM4.2 to RM4.3 versus the US dollar in the third quarter of this year before strengthening to RM4.15 by year-end.
The year-end target of the ringgit versus the US dollar was an upward revision from 4.35 previously.
“We reckon that economic fundamentals have increasingly overtaken US dollar’s weak performance in prompting the current ringgit uptrend, but its upside is still facing some resistance amid lingering external risks.
“Additional lift for the ringgit would likely be driven by the market paring down the dollar strength on Washington’s mounting political woes and the United States Federal Reserve’s challenge to retain market confidence on its rate normalisation plan,” said the research house in a note yesterday.
MIDF Research head of research Mohd Redza Abdul Rahman said the signals were certainly pointing to a stronger ringgit.
“For example, the improving current account to gross national income has lent support for the ringgit to strengthen further,” he told NST Business.
MIDF Research had a forecast of RM4.20 against the US dollar.
Yesterday, the ringgit slipped 0.21 per cent to RM4.2765 from Wednesday’s close of RM4.2675.