Ringgit Likely To Trade Around RM4.20–RM4.22 Next Week On Uncertainties Over Us Interest Rates

By Siti Noor Afera Abu

KUALA LUMPUR, Aug 16 (Bernama) -- The ringgit is expected to hover between RM4.20 and RM4.22 next week as traders and investors remain cautious over the trajectory of US interest rates.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the release of the US Federal Open Market Committee (FOMC) meeting minutes next Thursday, Aug 20 (Wednesday, Aug 19, in the US) could offer more clarity on the state of the US economy, particularly after two FOMC members dissented from the recent decision and favoured a 25-basis-point rate cut.

Meanwhile, Kenanga Investment Bank Bhd said that markets continued to swing between two and three US Federal Reserve (Fed) cuts over the past few weeks.

“We maintain our base case for two, underpinned by evidence that firms are absorbing tariff costs, a trend that is unsustainable and likely to squeeze margins,” it said in a research note.

Moreover, the investment bank said further easing would require either a major deterioration in the next jobs report or a significantly dovish tone from Fed chair Jerome Powell.

“Hence, we expect the ringgit to range around RM4.22 to RM4.23 against the greenback in the near term,” it added.

On Thursday, the ringgit appreciated to the 4.18 level against the US dollar, its strongest level in more than six weeks. The last time it reached a similar high was on July 1, when it hit 4.1805.

Meanwhile, on a Friday-to-Friday basis, the ringgit ended the week higher against the greenback, closing at 4.2085/2155 versus 4.2420/2480 previously. 

The local note traded mostly higher against a basket of major currencies.

The ringgit appreciated vis-à-vis the Japanese yen to 2.8653/8702 from 2.8720/8763 the previous week and rose versus the euro to 4.9185/9267 from 4.9381/9451, but declined against the British pound to 5.7050/7145 from 5.7034/7114

The ringgit also trended firmer against ASEAN currencies.

The local note improved against the Singapore dollar to 3.2820/2877 from 3.3014/3064 at the end of last week, inched up versus the Thai baht to 12.9760/13.0032 from 13.1173/1419, gained versus the Indonesian rupiah to 260.2/260.8 from 260.3/260.8 and strengthened against the Philippine peso to 7.37/7.39 from 7.43/7.44 in the preceding week.

-- BERNAMA