Kuala lumpur: The ringgit is anticipated to remain stable, trading within the RM4.12 to RM4.14 range next week, as traders and investors exercise caution ahead of the US Federal Reserve's (Fed) Federal Open Market Committee (FOMC) meeting scheduled for December.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that the Fed's interest rate decision, with an over 80 percent probability of a 25-basis-point cut, continues to significantly impact the local currency. He highlighted upcoming US data, such as the Institute for Supply Management (ISM) index, Personal Consumption Expenditures (PCE) inflation, and the University of Michigan Consumer Sentiment Index (CSI), as key indicators to watch next week.
Throughout the past week, the ringgit rose on Monday, Tuesday, and Thursday but saw a slight dip on Wednesday, eventually ending the week stronger amid growing expectations of a US rate cut in December. Kenanga Investment Bank Bhd (Kenanga IB) reported that the ringgit maintained its strength within a narrow RM4.13-RM4.14 range against the US dollar, coinciding with the US Dollar Index (DXY) dropping below the 100.0 threshold.
Dr. Mohd Afzanizam further stated that Bank Muamalat anticipates the US dollar-ringgit pair to trade stronger in the RM4.12-RM4.13 band next week. Kenanga IB echoed this sentiment, suggesting that with minimal challenges to the prevailing 'Fed-cut' narrative, investors might continue to support bets on a December rate cut, potentially skewing US dollar risks to the downside.
On a weekly basis, the ringgit appreciated against the US dollar, closing higher at 4.1300/1350 compared to 4.1460/1495 the previous week. The local currency also showed a mostly upward trend against a basket of major currencies. It strengthened against the yen at 2.6420/6456 from 2.6453/6479, gained against the euro to 4.7768/7825 from 4.7779/7819, but fell against the British pound at 5.4528/4594 from 5.4143/4188 at last week's close.
The ringgit's performance against its ASEAN peers was mixed. It rose against the Indonesian rupiah to 247.6/248.0 from 248.0/248.3 and appreciated against the Indonesian rupiah to 247.6/248.0 from 248.0/248.3. However, it declined against the Singapore dollar to 3.1813/1857 from 3.1695/1724 and remained flat against the Philippine peso at 7.04/7.06 from 7.04/7.05.