KUALA LUMPUR, March 7 — The ringgit is expected to trade cautiously against the United States (US) dollar next week as market sentiment continues to be shaped by developments in the Middle East, while investors will also keep a close watch on the trajectory of crude oil prices and upcoming US economic data.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said next week, the focus will remain on the Middle East conflict.
Important data points include the US Consumer Price Index and personal consumption expenditures for February, but geopolitical factors are likely to overwhelm their impact.
“What the market is hoping for is a de-escalation in the conflict, yet that seems to be elusive at the current juncture,” he told Bernama.
Meanwhile, Kenanga Investment Bank Bhd opined that markets remain focused on the path of crude prices and their implications for US inflation and Federal Reserve policy.
While Malaysia benefits economically from higher oil prices in the short term, the ringgit no longer serves as a traditional oil proxy and instead trades more like a high-beta emerging-market currency.
“Until investors gain clearer visibility on the conflict’s duration, the US dollar should remain supported, keeping the ringgit pressured around 3.94-3.98 per US dollar,” it said.
On a week-on-week basis, the ringgit ended the week lower against the US dollar to close at 3.9425/9535 compared with 3.8910/8960 on the previous Friday.
The local note traded mostly weaker against a basket of major currencies this week.
It edged down versus the Japanese yen to 2.4973/5044 yesterday, from 2.4930/4963 a week earlier, and fell vis-à-vis the British pound to 5.2530/2676, from 5.2470/2538. However, it rose against the euro to 4.5634/5762 from 4.5898/5957 previously.
Meanwhile, the ringgit traded mixed compared with its ASEAN peers.
The local currency fell versus the Singapore dollar to 3.0779/0867 from 3.0742/0784 a week earlier and slipped vis-à-vis the Indonesian rupiah to 232.9/233.6 from 231.7/232.2, but it gained against the Philippine peso to 6.68/6.70 from 6.75/6.76 previously and strengthened versus the Thai baht to 12.3392/3810 from 12.5153/5370.
