Kuala Lumpur: The ringgit is anticipated to remain firm with an upside bias against the US dollar in the coming week, as attention turns to the upcoming release of the US central bank meeting minutes and the US personal consumption expenditures inflation report.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid predicts that the current upward trend of the ringgit will persist due to ongoing concerns about the US fiscal position. He noted that the USD/MYR has breached its immediate support level of RM4.2624, with the next resistance level for the ringgit located at RM4.0947, suggesting potential further strengthening of the local currency against a weak US dollar outlook.
Amid the 46th ASEAN Summit in Kuala Lumpur on May 26-27, SPI Asset Management managing partner Stephen Innes expects the ringgit to trade with a modest tailwind, reflecting broader US dollar softness and renewed interest in emerging Asia's foreign exchange. Innes mentioned that while the ASEAN Summit itself may not be a significant market mover, investor sentiment could be influenced by policy developments, particularly those indicating tighter ASEAN integration, moves towards de-dollarisation, or alignment with US trade objectives.
Innes further elaborated that a supportive tone from the summit could bolster Malaysia's position in regional supply chains and digital trade corridors, enhancing confidence in the ringgit. Potential announcements regarding cross-border digital payment infrastructure, logistics hubs, or energy transition financing could positively impact foreign direct investment sentiment and bring short-term bullishness to the ringgit. However, he cautioned that without concrete capital commitments, these would primarily contribute to narrative rather than substantial market changes.
The ringgit closed the week stronger against the US dollar at 4.2285/2345, compared to 4.2900/2980 the previous week. Nonetheless, the local currency traded mostly lower against a basket of major currencies, appreciating against the euro but weakening against the Japanese yen and the British pound.
Against ASEAN currencies, the ringgit showed a mixed performance, strengthening against the Singapore dollar, Philippine peso, and Indonesian rupiah, while falling against the Thai baht.