Kuala lumpur: The ringgit is anticipated to remain within a narrow trading range against the US dollar in the coming week, as market participants exercise caution ahead of the forthcoming Federal Open Market Committee (FOMC) meeting.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid emphasized that the primary focus of market observers will be the FOMC meeting set for October 28 and 29. He noted that the market has largely priced in an expected 25-basis-point rate cut. However, uncertainty remains regarding the Federal Reserve's policy direction, especially if the ongoing United States government shutdown remains unresolved.
In light of these developments, Dr. Mohd Afzanizam predicts that the ringgit will continue to trade within a tight range of RM4.22 to RM4.23 against the US dollar next week. Meanwhile, the release of the US Consumer Price Index (CPI) for September, marking a significant economic report since the government shutdown began on October 1, provided further insight into the Federal Reserve's potential interest rate path.
The data revealed that the core CPI increased to 330.54 in September from 329.79 the previous month, while overall inflation eased to 3.0 percent, a figure lower than anticipated. This suggests that inflationary pressures are moderating, offering clues into the Fed's interest rate considerations.
On a weekly basis, the ringgit showed resilience against the greenback, closing slightly higher at 4.2210/2255 compared to 4.2240/2275 the previous week. Additionally, the local currency strengthened against a range of major currencies and its ASEAN counterparts.
The ringgit appreciated against the Japanese yen, trading at 2.7592/7623 from 2.8218/8244, and strengthened versus the euro to 4.9010/9062 from 4.9421/9462. It also gained against the British pound, closing at 5.6232/6292 from 5.6741/6788 the previous week. Further gains were observed against the Singapore dollar, Thai baht, Philippine peso, and Indonesian rupiah, showcasing the ringgit's relative performance in the regional market.