KUALA LUMPUR: The ringgit is expected to trade with upside bias against the US dollar this week, moving in the range of 4.3750 to 4.4000, an analyst said.
SPI Asset Management managing director Stephen Innes said the greenback is expected to trade off the back foot in the future on heightened expectations of a pause to the United States (US) Federal Reserve’s (Fed) rate-hike cycle amid signs of cooling inflation.
“The dovish Fed will still be the main narrative next (this) week and the ringgit is expected to trade slightly stronger. With the Fed expected to pause rate hikes after a 25 basis points hike in May with the risks skewed for a possible rate cut later in 2023, the dollar could weaken further, hence supporting the ringgit.
“Perhaps the only reason the ringgit is not trading stronger is a combination of a lethargic local equity markets and an uptick in US-China tensions over Taiwan,” he told Bernama.
He said another big drawback is China’s lack of consumer consumption, as locals are worried about job security and are being quite frugal so far.
On a week-on-week basis, the ringgit was traded lower against the US dollar at 4.4000/4025 against Friday’s close of 4.3995/4035 two weeks earlier.
Meanwhile, the local note traded mostly lower against a basket of major currencies compared to two weeks earlier.
It weakened against the British pound at 5.5031/5062 from 5.4730/4780 two weeks earlier and dropped against the euro to 4.8660/8687 from 4.8016/8060, but rose vis-a-vis the Japanese yen to 3.3208/3229 from 3.3411/3443.
Meanwhile, the ringgit traded mixed against its ASEAN counterparts.
The local note was lower versus the Singapore dollar at 3.3183/3204 from 3.3079/3114 in the previous week and depreciated against the Indonesian rupiah to 299.1/299.5 from 295.00/295.30 previously.
It, however increased vis-a-vis the Philippine peso to 7.97/7.98 from 8.08/8.09 and improved against the Thai baht
to 12.9070/9208 from 12.9090/9279 previously. – BERNAMA
