Selangor Journal

Ringgit likely to see cautious trading next week

KUALA LUMPUR, Jan 13 — The ringgit is expected to continue trading cautiously next week as investors await a slew of economic data scheduled to be released by several major economies.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said next week, the focus will be on China’s fourth-quarter 2023 gross domestic product numbers, which will be released on Wednesday (January 17), along with the United Kingdom and European Union’s consumer price index (CPI).

“Given the recent United States CPI print, which turned out to be higher than expected, markets would reassess their position on whether the rate cut could happen as early as March,” he told Bernama.

Afzanizam said the ongoing military conflicts in the Red Sea and Yemen could result in higher crude oil prices, impacting inflation.

“The ongoing conflicts occurring in the Red Sea have resulted in the decline in traffic by as much as 20 per cent year-on-year as most vessels needed to reroute to the Cape of Good Hope in a bid to avoid the conflicting areas.

“Such endeavour would certainly be costly and time-consuming, which essentially would exert pressure on the cost of doing business,” he said.

Ultimately, it depends on the US Federal Reserve whether it will ease its monetary policy sooner or seek to take stock of the current developments on inflation.

“It is a little of neither here nor there situation as the markets might be indecisive. On that note, we expect the USD/MYR pair to languish around 4.63 to 4.65 next week,” Afzanizam added.

For the week that just ended, the local note was traded higher as concerns over the US CPI data have caused some investors to turn to emerging currencies.

On a Friday-to-Friday basis, the ringgit was higher against the US dollar at 4.6455/6500 from 4.6525/6580 a week earlier.

The local unit also traded mostly lower against other major currencies.

It rose vis-à-vis the Japanese yen to 3.2007/2040 from 3.2038/2078 a week earlier but declined against the British pound to 5.9239/9297 from 5.8891/8961 and depreciated versus the euro to 5.0924/0973 from 5.0763/0823 at the previous Friday’s close.

The ringgit, however, was traded higher against a few Asean currencies.

It strengthened versus the Singapore dollar to 3.4900/4936 from 3.4944/4988 a week ago and advanced against the Thai baht to 13.2464/2664 from 13.4001/4236 previously.

The ringgit was higher against the Indonesian rupiah at 298.6/299.1 from 299.8/300.3 on Friday last week and appreciated against the Philippine peso to 8.30/8.32 from last week’s closing rate of 8.37/8.38.

— Bernama

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