The ringgit is likely to continue its downward trend next week, trading at between 3.96 and 3.99 against the US dollar, as investors await the release of external trade figures due to be released early next week.

Both the Nikkei Manufacturing Purchasing Managers' Index (PMI) and the latest Trade Balance report will be announced on Monday and Tuesday.

MIDF Amanah Investment Bank Bhd chief economist Kamarudin Mohd Nor said the local note was expected to remain under pressure in the near term over uncertainty with regards to global trade tension, as well as geopolitical developments in the European Union.

“However, stable and improved commodities prices would lend some support to the ringgit.

“On the domestic front, greater clarity in the policy direction, especially on the fiscal front, will help to boost investors’ confidence... we foresee all major macroeconomic indicators to remain upbeat,” he told Bernama.

Meanwhile, FXTM Global head of currency strategy and market research Jameel Ahmad said next week would likely be another busy period for the financial markets with the release of domestic economic data.

“This means that the ringgit could be in store for further volatility over the upcoming week,” he added.

Investors seem to be standing on the sidelines as they are looking for guidance over what momentum the Malaysian economy will carry into the second quarter of the year.

“If both readings surpass expectations, there is going to be optimism that the Malaysian economy will be able to show gross domestic product growth of above five percent for the second quarter,” Jameel said.

Elsewhere, the ongoing political event risks in the western world still carry the potential to influence volatility into the emerging market currencies, hence pushing investors to be more cautious.

“A lack of risk appetite from investors is still seen as the most significant threat to the ringgit potentially falling back below 4.00 level against the dollar,” he added.

On a Friday-to-Friday basis, the local note rose against the greenback to 3.9770/9800 from 3.9790/9830.

It declined against the Singapore dollar to 2.9728/9761 from 2.9721/9753 and depreciated against the yen to 3.6393/6430 from 3.6348/6391.

However, the local note strengthened vis-a-vis the British pound to 5.2902/2946 from 5.3128/3197, and increased against the euro to 4.6551/6594 from 4.6606/6665 previously.

The market was closed on Tuesday for Wesak day.

- Bernama