Qualampur: An analyst stated that the Ringit is expected to be unstable next week, moving in the range between 4.24 and 4.26 against the US dollar.
Bank Malaysia Malaysia BHD Chief Economist Dr. Mohammad Afzanim Abdul Rashid told Bernma that apart from the United States (US) tariff, the next important question is whether the Federal Reserve (Fed) will cut interest rates.
On that note, he said that the major data points would be the US Consumer Price Index (CPI) for June.
Thus, the rate of inflation during the 90-day stagnation period has been quite manageable.
“Obviously, the complete implementation of mutual tariffs on 1 August will result in high inflation, which may require the federal fund rate (FFR) to keep as an ideal policy decision.
“The US Dollar Index is slowly climbing and therefore, the emerging market currencies, including the ringt, can live on the low side,” said Mohammad Afzaniz.
Meanwhile, SPI Asset Management Managing Partner Stephen Inse also said that the Ringit is expected to trade within a narrow range before the release of US CPI next week, which is a major economic event of shaping market direction and Fed Policy expectations.
The upcoming US inflation report will be closely seen by the financial markets on Tuesday, as it can give a clear indication on the route of interest rates, he said.
INS said that the market is particularly focused on the core CPI figures of CPIs, as a significant range with 0.3 percent.
INS said, “A soft-to-approved reading can revive hopes for the September rate cut by Fed, possibly leading to a pullback in the US dollar and giving some relief to the ringt,” Insa said.
However, he warned that a strong print, especially at 0.4 percent or more, would possibly move the market expectations towards a more Hawkish Fed, which would increase the strength of the dollar afresh.
He said, “In that scenario, the US dollar-ringgit pair can climb 4.2700, although any initial spike can be short-lived if taking advantage emerges,” he said.
He estimated the Ringit to trade within a strategic range of 4.2400 to 4.2650, which was expected to further tighten the market situation.
“For now, a vehicle operated by the Ringit US Macro results – not a driver in itself,” INN said.
Based on Friday-to-Friday, the Ringit reduced the week against the Greenback, which was closed at 4.2180/2260 before 4.2475/2525.
Local notes do business against a basket of most major currencies.
Ringit appreciated the Japanese Yen from 2.8893/8929 to 2.9225/9282, and increased against the British pound to 5.7524/7592, from 5.7601/7710 to 5.7524/7592 on Friday to 5.7524/7592.
However, it fell from 4.9675/9770 to Euro vs 4.9679/9737 at the end of last week.
Against the ASEAN currencies, the ring -up business was reduced.
The local note was below the Singapore dollar to 3.3186/3228 to 3.3114/3182, and the vs. Indonesian Rupiah narrowed 261.8/262.3 before 260.6/261.2.
It weakened the Thai Baht from 13.0302/0609 to 13.0668/0886 and last Friday declined 7.52/7.49 against the Philippine Peso to 7.52/7.53 against the Philippine Peso.
