Kuala Lumpur: The ringgit is expected to remain weak in the near term, driven by optimism surrounding a potential trade deal between the United States and China during the ongoing 90-day negotiation period.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, indicated that the anticipation of US-China talks by the end of the week may have heightened interest in the US dollar. China's trade data from April showed a 21 percent decline in exports to the US, while exports to ASEAN and the European Union increased by 22.5 percent and 8.3 percent, respectively. This trend is likely to persist if tariff issues remain unresolved.

Mohd Afzanizam highlighted that the focus next week will be on the US consumer price index for April 2025, which is scheduled for release on May 13, 2025, along with retail sales data for the same month, due on May 15, 2025. He also mentioned that the market will keep a close watch on Malaysia's first quarter of 2025 GDP data, set to be released on May 16, 2025, forecasting a 4.5 percent growth for Malaysia's 1Q 2025 GDP, supported by international activities in the short term. The outcome of trade negotiations will be crucial for the second half of 2025.

Dr. Mohd Afzanizam expects the ringgit to trade within a range of 4.30 to 4.33 against the US dollar next week. The ringgit ended the week weaker against the US dollar, closing at 4.2970/3005, compared to 4.2560/2600 the previous week. The local currency also declined against major currencies such as the euro, Japanese yen, and British pound.

Furthermore, the ringgit traded lower against ASEAN currencies, depreciating against the Indonesian rupiah, Singapore dollar, Thai baht, and Philippine peso. These movements reflect the broader pressures on the ringgit amid ongoing global economic uncertainties and trade negotiations.