KUALA LUMPUR, Jan 25 — The ringgit is expected to trade cautiously against the greenback next week, ahead of the US Federal Open Market Committee (FOMC) meeting, and to remain within the RM4.37 to RM4.38 range, an economist said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said consensus anticipates no change in the Fed Funds Rate.
He noted that markets will also closely monitor the US personal consumption expenditures (PCE) data for December 2024.
"My sense is that there could be a breather, as indications from US President Donald Trump suggest a less hawkish stance for now.
“The fact that he favours interest rate cuts would ease tensions between the White House and the Fed, making the central bank's task more manageable."
"On that note, we foresee the ringgit staying in the range of RM4.37 to RM4.38 (versus the US dollar) next week," he told Bernama.
The ringgit rose to its highest level in almost three months against the US dollar on Friday, after Trump adopted a softer tone on China tariffs and signalled a preference for lower interest rates.
On a Friday-to-Friday basis, the ringgit appreciated to 4.3750/3800 from 4.5040/5085 a week ago.
Meanwhile, the local currency strengthened against a basket of major currencies.
It gained against the British pound, reaching 5.4373/4435 from 5.4953/5008 at the end of the previous week, increased against the Japanese yen to 2.8115/8149 from 2.8918/8949, and strengthened against the euro to 4.5911/5964 from 4.6382/6429.
The ringgit also traded higher against Asean currencies.
It rose against the Thai baht to 13.0015/0241 from 13.0664/0856 at the previous Friday’s close, edged up against the Singapore dollar to 3.2482/2522 from 3.2948/2983, improved against the Indonesian rupiah to 270.5/270.9 from 274.9/275.3, and advanced against the Philippine peso to 7.50/7.51 from 7.68/7.69.
— Bernama
