KUALA LUMPUR: The ringgit is expected to trade cautiously against the US dollar next week ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes on February 20.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said traders and market participants would assess the US Federal Reserve’s (Fed) stance on easing monetary policy this year.
“We opined that the Fed is not in a hurry to reduce the Fed Fund Rate (FFR) in the near future.
“This is because the prevailing FFR is still restrictive, and the Fed would like to see the inflation trajectory steer towards its two per cent target, especially after US inflation data came in higher than expected.”
US headline inflation and the core consumer price index rose 3.0 per cent and 3.3 per cent, respectively, in January.
Mohd Afzanizam said the local note could test the immediate support level of RM4.43 next week.
For the week just ended, the ringgit fluctuated between gains and losses on concerns over policy uncertainties under US President Donald Trump.
However, it rebounded from oversold levels and ended the week higher, supported by Malaysia’s strong 2024 gross domestic product performance.
On a Friday-to-Friday basis, the ringgit appreciated to 4.4310/4385 from 4.4375/4420 the previous week.
Meanwhile, the local currency was mostly lower against major currencies.
It weakened against the British pound to 5.5769/5863 from 5.5278/5334 and slipped against the euro to 4.6437/6515 from 4.6101/6148. However, it strengthened against the Japanese yen to 2.9048/9099 from 2.9217/9249.
The ringgit also fell against most ASEAN currencies.
It declined against the Indonesian rupiah to 272.6/273.2 from 272.4/272.9 and weakened against the Singapore dollar to 3.3055/3113 from 3.2866/2901. It also edged down against the Philippine peso to 7.66/7.68 from 7.65/7.66.
However, the local note rose against the Thai baht to 13.1761/2059 from 13.1853/2041.
