KUALA LUMPUR, June 14 — The ringgit is expected to trade within a narrow range next week, as investors remain cautious amid ongoing global inflation concerns.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the local currency is likely to fluctuate between 4.22 and 4.24 against the United States (US) dollar.
Market attention will be on the upcoming US Federal Open Market Committee (FOMC) meeting from June 17 to June 18.
“The focus would be on the quarterly forecast by the US Federal Reserve’s (US Fed) staff, particularly the outlook for the Fed Funds Rate for the remainder of the year,” he told Bernama.
Afzanizam added that besides the US Fed, several central banks are set to meet next week, including the Bank of England, the Bank of Japan, and the People's Bank of China. Central banks in the Asean region, including the Bank of Indonesia and Bangko Sentral ng Pilipinas, will also hold meetings during this period.
Generally, he opined that global interest rates are trending downward as global growth prospects have become more challenging due to tariff shocks.
Meanwhile, Afzanizam said Israel’s strikes on Iran’s nuclear facilities resulted in a sharp rise in Brent crude prices to a high of US$78.22 per barrel before prices retreated towards US$73.56 per barrel. The US Dollar Index gained 0.31 per cent to 98.228 points.
“Hence, geopolitics has taken centre stage on Friday, and it has benefited the US dollar at the moment,” he said.
Reports suggested that a direct military conflict between Israel and Iran could lead to a significant appreciation of the US dollar. The US Fed’s response to these dynamics, particularly regarding interest rates, will be crucial in shaping the US dollar's trajectory in the near term.
For the week that just ended, the ringgit gave up its earlier gains as escalating geopolitical concerns spurred demand for the safe-haven US dollar.
The ringgit ended the week easier against the greenback, closing at 4.2435/2480 on Friday from 4.2270/2360 a week earlier.
The local note traded lower against a basket of major currencies.
The ringgit fell vis-à-vis the Japanese yen to 2.9448/9482 from 2.9324/9390 at Friday’s close, slipped against the British pound to 5.7482/7543 from 5.7212/7334 previously, and depreciated versus the euro to 4.8906/8958 from 4.8268/8371 at the end of last week.
The ringgit traded mostly lower against Asean currencies.
The local note declined against the Singapore dollar to 3.3077/3118 on Friday from 3.2862/2934 in the previous week, weakened versus the Indonesian rupiah to 260.2/260.6 from 259.5/260.2 previously, and slid versus the Thai baht to 13.0807/1018 from 12.9599/9947 last week.
Meanwhile, the ringgit remained unchanged against the Philippine peso at 7.55/7.56.
— Bernama
