KUALA LUMPUR: The ringgit is expected to remain defensive within the 4.43-4.44 range against the US dollar next week, as cautious investor sentiment continues to strengthen demand for the greenback as a safe-haven currency, said an analyst.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the next trend in the currency market will be predicated on the upcoming Federal Open Market Committee meeting on March 18-19.
“While economists are mostly pencilling in no change in the United States (US) Federal Funds Rate, the Federal Reserve’s staff quarterly forecast will be closely scrutinised by traders and investors.
“This is especially true when calls for a US recession have been widely shared by the major investment banks,” he told Bernama today.
Additionally, both the Bank of Japan and Sweden’s Sveriges Riksbank are set to hold their monetary policy meeting next week, with both central banks expected to maintain their policy rate steady at 0.50 per cent and 2.25 percent, respectively.
Meanwhile, SPI Asset Management managing partner Stephen Innes expects the ringgit to weaken further in the coming months as markets transition from tariff-related caution to dealing with their full impact.
“Next week, I anticipate a drift higher, with the ringgit likely trading closer to RM4.46 as sentiment continues to sour.
“Therefore, the ringgit is likely to trade in the range of RM4.43 to RM4.46, with a clear bearish bias,” he added.
Year-to-date, the ringgit gained 0.64 per cent against the US dollar but weakened against other major currencies.
The local currency ended the week at 4.4410/4455 against the greenback, easing from 4.4110/4145 the previous week.
The ringgit traded mostly lower against other major currencies.
It rose versus the Japanese yen to 2.9809/9842 from 2.9909/9935 last week but dipped against the British pound to 5.7404/7463 from 5.7070/7115 and declined vis-a-vis the euro to 4.8194/8243 from 4.7903/7941, previously.
The local note also depreciated against ASEAN currencies.
It eased versus the Singapore dollar to 3.3241/3277 from 3.3185/3214, edged lower against the Thai baht to 13.1820/2020 from 13.1124/1290, slipped vis-a-vis the Indonesian rupiah to 271.6/272.0 from 270.6/271.0 and ended marginally lower against the Philippine peso to 7.75/7.77 from 7.71/7.73, last week.
