Kuala lumpur: The ringgit is expected to hover between RM4.20 and RM4.22 next week as traders and investors remain cautious over the trajectory of US interest rates. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the release of the US Federal Open Market Committee (FOMC) meeting minutes next Thursday could offer more clarity on the state of the US economy. This comes after two FOMC members dissented from the recent decision, favoring a 25-basis-point rate cut.
According to BERNAMA News Agency, Kenanga Investment Bank Bhd stated that markets have been fluctuating between expectations of two and three US Federal Reserve (Fed) cuts over the past few weeks. The bank maintains its base case for two cuts, underpinned by evidence that firms are absorbing tariff costs, a trend perceived as unsustainable and likely to squeeze margins. Further easing would require a major deterioration in the next jobs report or a significantly dovish tone from Fed chair Jerome Powell.
Kenanga Investment Bank Bhd expects the ringgit to range around RM4.22 to RM4.23 against the greenback in the near term. The ringgit appreciated to the 4.18 level against the US dollar on Thursday, marking its strongest level in more than six weeks. The last similar high was recorded on July 1, at 4.1805.
On a Friday-to-Friday basis, the ringgit ended the week higher against the greenback, closing at 4.2085/2155 versus 4.2420/2480 previously. The local currency also traded mostly higher against a basket of major currencies. It appreciated against the Japanese yen to 2.8653/8702 from 2.8720/8763 the previous week and rose versus the euro to 4.9185/9267 from 4.9381/9451. However, it declined against the British pound to 5.7050/7145 from 5.7034/7114.
The ringgit also trended firmer against ASEAN currencies, improving against the Singapore dollar to 3.2820/2877 from 3.3014/3064 at the end of last week, inching up versus the Thai baht to 12.9760/13.0032 from 13.1173/1419, gaining versus the Indonesian rupiah to 260.2/260.8 from 260.3/260.8, and strengthening against the Philippine peso to 7.37/7.39 from 7.43/7.44 in the preceding week.