The ringgit is forecast to trade between RM4.05 and RM4.08 against the US dollar next week as markets await Bank Negara Malaysia’s OPR announcement.
KUALA LUMPUR: The ringgit is expected to trade within a narrow range against the US dollar next week as investors adopt a cautious stance ahead of Bank Negara Malaysia’s (BNM) policy meeting.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said traders will be closely watching the central bank’s Monetary Policy Committee (MPC) meeting on January 22.
He believes BNM is likely to maintain the overnight policy rate (OPR) at 2.75%.
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“The growth trajectory has been commendable, while the inflation rate remains low,” he told Bernama.
Afzanizam forecast the ringgit would oscillate between RM4.05 and RM4.06 against the US dollar next week.
Kenanga Investment Bank Bhd expects the ringgit to trade within the RM4.05 to RM4.08 range.
The investment bank noted that continued pressure on the US Federal Reserve strengthens the case for a gradual de-dollarisation trend.
It said concerns over the Fed’s independence could weigh on the American dollar, although the Dollar Index may find stability in the coming weeks.
Seasonal factors and resilient US economic data are expected to support the index.
“Also, if the investigation on Fed chairman Jerome Powell is dropped, the US dollar could rebound,” Kenanga said in a note.
The ringgit ended the week slightly lower against the US dollar on Friday.
It closed at 4.0555/0605 compared with 4.0700/0765 a week earlier.
The local currency traded higher against a basket of major currencies on a week-on-week basis.
It strengthened against the Japanese yen to 2.5637/5670 from 2.5805/5848.
The ringgit appreciated versus the euro to 4.7076/7134 from 4.7383/7459.
It also appreciated vis-a-vis the British pound to 5.4332/4399 from 5.4579/4666.
The ringgit traded firmer against its ASEAN peers.
It appreciated against the Indonesian rupiah to 240.1/240.5 from 241.9/242.4.
The local currency inched up against the Philippine peso to 6.83/6.84 from 6.87/6.88.
It rose against the Thai baht to 12.9115/9332 from 12.9474/9738.
The ringgit was higher against the Singapore dollar to 3.1479/1521 from 3.1629/1682. – Bernama
