Ringgit to trade cautiously against the US dollar this week

KUALA LUMPUR: The ringgit is likely to trade cautiously this week, hovering between RM4.09 and RM4.11 against the US dollar after strengthening by 0.39% week-on-week.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said a series of key United States data releases this week will provide fresh guidance for market participants.

These include the non-farm payrolls, consumer price index and personal consumption expenditures as well as the University of Michigan consumer sentiment index.

“This is also alongside a series of speeches by Federal Reserve (Fed) officials, who are expected to share reservations regarding inflationary risk, as it is still oscillating above the 2% level,” he told Bernama.

Earlier last week, the local note hovered at RM4.11 last Monday and started to weaken last Wednesday ahead of the Federal Open Market Committee or FOMC meeting, before finally rebounding after the Fed cut the interest rate, which brought the local note to 4.1040 last Thursday.

The ringgit marched stronger at the end of the week, reaching the 4.09 level last Friday – hitting a new four-year-and-seven-month high, supported by positive Malaysian economic data.

On a weekly basis, the ringgit strengthened against the greenback, closing higher at 4.0945/1005 compared with 4.1105/1140 last week.

The local note traded mostly higher against a basket of major currencies.

It strengthened against the yen to 2.6264/6304 from 2.6536/6561, and climbed vis-a-vis the British pound to 5.4789/4869 from 5.4859/4905. However, it slipped versus the euro to 4.8037/8107 from 4.7912/7953 at the previous week’s close.

The ringgit also trended mostly higher against its Asean peers.

It appreciated versus the Indonesian rupiah to 245.9/246.4 from 246.8/247.2 the previous week, increased against the Singapore dollar to 3.1701/1750 from 3.1741/1773 previously, and was higher against the Philippine peso at 6.93/6.94 from 6.97/6.98.

However, the local currency weakened versus the Thai baht to 12.9589/9845 from 12.9054/9221 a week ago.