RInggit faces cautious trading next week

The ringgit is expected to trade cautiously against the US dollar next
week with external headwinds arising from the US and Europe debt woes.


"Although European policymakers had extended an olive branch in the
form of extra aid for Greece, the US is still pressed for time to raise
its debt ceiling while cutting spending," a dealer said.


He said developments and uncertainties in the US market would definitely weigh on the trading of the greenback next week.


"Risk sensitive Asian currencies would definitely see an increase
in volatility arising from the uncertainties in other major markets," he
said.





The US dollar depreciated against other major currencies after losing
ground this week due to concerns that the US may not lift its debt
ceiling in time, triggering a debt default which may possibly plunge the
nation back into recession.



During the week, the ringgit was on an upward trend against the US dollar as traders fled to other safe havens.


On Friday, the ringgit ended the week on gains for the fourth
consecutive day as escalating worries on a US debt default weighed on
global markets.


Friday also marked the sixth year since the shift to the managed float regime for the ringgit exchange rate.



In a statement, Bank Negara Malaysia said that in the six years, the
global economic landscape experienced exceptional developments, namely
the worst global economic and financial crisis since the Second World
War and extreme volatility in two-way capital flows.


"The exchange rate regime has accorded the economy with greater flexibility in facing these challenges," it said.


On a Friday-to-Friday basis, the ringgit rose against the US dollar to 2.9750/9775 from 3.0050/0080.


It was also higher against the Singapore dollar at 2.4593/4634 from 2.4651/4696 and the yen at 3.7874/7920 from 3.7918/7965.


However, it eased against the British pound to 4.8472/8527 from
4.8341/8399 and also against the euro to 4.2849/2894 from 4.2467/2518.
-- Bernama