KUALA LUMPUR: The ringgit is expected to trade within a narrow range against the US dollar this week as investors await policy signals from US Federal Reserve officials, according to Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
He said that with several Fed officials scheduled to speak publicly, the market will be looking for cues on future monetary tightening amid persistent inflationary pressures, particularly from elevated commodity prices.
Based on the latest Fed projections, another 25-basis-point rate increase is anticipated this year, according to Mohd Afzanizam. “This means we’ll continue to see strong market conviction toward further tightening in the coming months,” he explained.
“Given this backdrop, trading in the ringgit is likely to remain cautious this week. We project the ringgit-dollar exchange rate to fluctuate between RM4.06 and RM4.09,” he added.
On a week-over-week basis, the ringgit weakened against the US dollar, settling at 4.0795/0840 compared to 4.0685/0725 the previous Friday.
Nevertheless, the local currency showed strength against a basket of major currencies during the week. Notably, it strengthened against the British pound to 5.4543/4603 from 5.4961/5015, appreciated versus the Japanese yen to 2.5829/5860 from 2.6400/6428, and improved against the euro to 4.6849/6901 from 4.7178/7225.
The ringgit also performed positively against regional peers. It rose slightly against the Singapore dollar to 3.1933/1971 from 3.2091/2125, and gained ground against the Thai baht to 12.2383/2562 from 12.3072/3241.
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