KUALA LUMPUR - The ringgit may extend its rally against the US dollar towards 3.53 next week if Brent crude futures advance above US$70 a barrel.
A local senior currency trader shared this on the back of risk appetite and the greenback's weaknesses, ringgit would continue rebound as crude oil climbed higher.
"Many speculators started cutting short positions on the ringgit and more will cut if the 3.53 level broke.
"This could happen when Brent crude futures advance above US$70 a barrel," he said, adding that many speculators used sliding oil price as an excuse to sell ringgit earlier, claiming Malaysia is a net oil exporter.
Brent crude for July 2015 delivery, the global benchmark, settled the week up 11 cents at US$66.81 a barrel on the Intercontinental (ICE) Futures Europe exchange.
On a weekly basis, Brent was up in five of the past six weeks, having risen from a nearly six-year low of US$45.19 in January.
He said the ringgit current rally was also led by US dollar weakness and more volatility could be seen next week if US data would continue to show a slowdown as it would lower the chance of a rate hike by the Federal Reserve this year.
"Perhaps we could see 3.50 much earlier, within this quarter," he told Bernama.
The ringgit could also extend its rally next week in anticipation of more economic goodies from the 11th Malaysia Plan to be tabled by Prime Minister next week (May 21), he added.
On a weekly basis, the ringgit was traded stronger against the US dollar at 3.5620/5660 from last Friday's 3.5950/5980.
The ringgit ended the week broadly higher against the greenback as the market reacted to Malaysia's first quarter (Q1) gross domestic product (GDP) growth released Friday that beat market forecasts.
Malaysia registered a strong Q1 GDP growth of 5.6 per cent with the private sector remaining the anchor of growth, surpassing the earlier market forecast of between 5.4 and 5.5 per cent.
The local note however, ended the week mixed against other major currencies.
It improved against the Singapore dollar to 2.6889/6940 from 2.7004/7036 last Friday and strengthened against the yen at 2.9785/9826 from 2.9936/9973 last week.
The local currency weakened against the British pound to 5.6052/6132 from 5.5643/5701 last week and edged down against the euro to 4.0447/0503 versus 4.0383/0427 last Friday. - BERNAMA
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