KUALA LUMPUR: The ringgit is likely to stay at the current level against the US dollar next week, with a slightly negative bias at RM4.54 to RM4.56 due to strong US macro data, said an analyst.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the next week's focus will be US data points, particularly the job market report and the Insitute for Supply Management (ISM) manufacturing index.
“As the US Federal Reserve (Fed) has become more data dependant, better-than-expected data points will lead to a strong dollar,” he told Bernama.
SPI Asset Management managing director Stephen Innes opined that stronger US gross domestic product (GDP) data is a bit of a short-term game-changer.
“We need to see better capital returns in Malaysia to sell the dollar and buy the ringgit. Currently, US yields are much higher, and stock market optimism is much better in the US right now,” he said.
The US real GDP data increased at an annual rate of 2.4 per cent in the second quarter of 2023, faster than expected.
“As such, that should present barriers next week although we remain optimistic on the ringgit next week at RM4.5460 to RM4.5660,” he said.
For the week just ended, the ringgit was traded mostly higher amid rising oil prices and the Fed’s decision to raise the Fed Fund Rate (FFR) by 25 basis points (bps).
On a Friday-to-Friday basis, the ringgit was higher against the US dollar at 4.5535/5565 from 4.5600/5655 a week earlier.
The local unit was traded mostly higher against major currencies.
It grew against the British pound to 5.8362/8401 from 5.9338/9371 the previous Friday, advanced versus the euro to 4.9966/9998 compared to 5.0799/0827 but depreciated vis-a-vis the Japanese yen to 3.2691/2715 from 3.2659/2679 previously.
The ringgit was traded higher against its Asean peers.
The local unit gained against the Singapore dollar to 3.4183/4208 from 3.4304/4350 a week earlier, better versus the Thai baht at 13.2058/2218 from 13.2327/2541, firmed against the Indonesian rupiah to 301.4/301.8 from 303.4/303.9 and rose vis-a-vis the Philippine peso to 8.29/8.31 versus 8.33/8.34 last Friday. -Bernama
