KUALA LUMPUR, May 4 — The ringgit is expected to trade cautiously against the US dollar in the near term as investors continue to closely watch local and global economic developments moving forward, an analyst said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said among others, US Federal Reserve (Fed) chairman Jerome Powell has clearly indicated that the option for a rate rise is not in the central bank’s baseline scenario although it is still concerned over inflation rate.
“An important event next week is Bank Negara Malaysia’s Monetary Policy Committee meeting on May 9, especially on its assessment on the recent policy changes and prospect for inflation.
“Other than that, a series of Purchasing Managers’ Indices, the Reserve Bank of Australia’s interest rate decision and China’s trade data will be released next week. On that note, the ringgit should linger around RM4.73 to RM4.74 per the US dollar next week,” he told Bernama.
This week, the ringgit, along with other Asean currencies, reacted towards the two-day Federal Open Market Committee meeting that concluded on Thursday.
According to a dealer, the outcome of the meeting clearly shows that the “higher for longer” narratives for the US interest rate are likely to stay in the near future, given the lack of progress in inflation reaching the Fed’s target level.
On a Friday-to-Friday basis, the ringgit strengthened to 4.7370/7400 versus the greenback from 4.7650/7710 a week earlier.
The local note also rose against the British pound to 5.9487/9525 from 5.9644/9719 over the week and appreciated vis-a-vis the euro to 5.0890/0922 from 5.1157/1221 previously, but it slipped versus the Japanese yen to 3.0947/0968 from 3.0408/0451.
The ringgit, meanwhile, traded mixed against Asean currencies.
It appreciated against the Thai baht to 12.8723/8850 from 12.8902/9120 on Friday last week and climbed versus the Philippine peso to 8.25/8.27 from 8.26/8.27 previously.
However, the local currency slipped against the Indonesian rupiah to 294.4/294.8 from 293.9/294.4 a week earlier and eased vis-a-vis the Singapore dollar to 3.5027/5054 from 3.5021/5068.
— Bernama
