Ringgit to trade in tight range of 4.72-4.73 versus US Dollar next week

KUALA LUMPUR: The ringgit is expected to trade in a tight range of RM4.72 to RM4.73 against the US dollar in the upcoming holiday-shortened week of trading, said an economist.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Brent crude oil prices were hovering above US$90 per barrel amid concern over geopolitical risks in the Middle East.

He said the foreign exchange market is on defensive mode with demand for safe haven currencies such as the US dollar becoming elevated. The US Dollar Index rose 0.17 per cent to 104.30 points on Friday.

“Although the Federal Reserve (Fed) rate cuts remained a highly contentious investment thesis, the heightened concern over a military conflict in the Middle East has resulted in higher crude oil prices. While this may feed into inflation, it could potentially alter the view of when the Fed would start to ease,” he told Bernama.

Meanwhile, SPI Asset Management managing director Stephen Innes said the US dollar stands to benefit from risk-off trading conditions spurred by geopolitical concerns.

“However, unless there is a significant surprise in Friday’s non-farm payrolls (NFP) release, it is more probable that next week’s releases of the latest US Consumer Price Index and Producer Price Index reports for March will carry more weight for Fed rate cut expectations and the direction of the US dollar throughout the rest of this month,” he shared prior to the NFP data publication.

On a Friday-to-Friday basis, the ringgit weakened to 4.7460/7490 versus the greenback compared with 4.7215/7280 a week earlier.

The local note traded lower against most other major currencies.

It slipped vis-a-vis the Japanese yen to 3.1341/1363 from 3.1194/1241 a week earlier, eased against the British pound to 5.9956/9994 from 5.9548/9630 previously, and fell against the euro to 5.1437/1470 from 5.0907/0977.

The ringgit traded mixed against ASEAN currencies.

It appreciated to 12.9495/12.9641 against the Thai baht from 12.9712/12.9983 on Friday last week and improved versus the Philippine peso to 8.39/8.41 from 8.40/8.42 previously.

However, the local currency depreciated against the Indonesian rupiah to 299.4/299.8 from 297.7/298.2 a week earlier and declined vis-a-vis the Singapore dollar to 3.5208/5233 from 3.4987/5040.

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