Ringgit to trade in tight range with upside bias next week
KUALA LUMPUR - The ringgit is expected to trade in a tight range between RM4.54 and RM4.55 with an upside bias next week as investors await the outcome of the United States Federal Open Market Committee (FOMC) meeting.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the FOMC meeting which will be held on July 25-26 is widely expected to announce a 25 basis point hike in the Fed Fund Rate (FFR)
"While this has already been priced in, their latest assessment on the current state of the economy is the key factor that will drive the foreign exchange market going forward. It will also determine the value of US dollar at a time when concern over the global growth prospect has become elevated.
"On one hand, concern over weaker global growth prospect will result in a higher US dollar as investors seek refuge in the safe haven currency. On the other hand, the Federal Reserve (Fed) may want to shift its stand in preparation for the eventual cut in the FFR possibly next year,
"As such, should the Fed become dovish, the ringgit could be moving towards its immediate support level of RM4.5491,” he told Bernama.
On a Friday-to-Friday basis, the ringgit was lower against the US dollar to 4.5600/5655 from 4.5255/5280 a week earlier.
The local unit was traded higher against major currencies.
It went up against the British pound to 5.8669/8740 from 5.9338/9371 on the previous Friday, appreciated vis-a-vis the Japanese yen to 3.2185/2229 from 3.2659/2679 and advanced versus the euro to 5.0735/0796 compared to 5.0799/0827 previously.
The ringgit was traded lower against its Asean peers.
The local unit slid against the Singapore dollar to 3.4304/4350 from 3.4263/4287 a week earlier and fell versus the Thai baht to 13.2327/2541 from 13.0689/0814.
It weakened against the Indonesian rupiah to 303.4/303.9 from 302.5/302.8 previously and declined vis-a-vis the Philippine peso to 8.33/8.34 versus 8.31/8.33 last Friday. - BERNAMA
