The ringgit will trade in a narrow range with a bearish bias against the greenback this week
KUALA LUMPUR, Feb 13 (Bernama): The Ringgit is expected to trade in a tight range with a downside bias between 4.18 and 4.19 against the US Dollar next week.
The local unit will be heavily weighted towards the US Dollar as the market continues to digest domestic and global economic data.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit moved in a narrow range last week and the trend is likely to continue despite the better gross domestic product (GDP) performance. than expected in the fourth quarter of 2021 announced on Friday. , which stood at 3.6% against consensus estimates of 3.1%.
Meanwhile, the US consumer price index (CPI), which came in at 7.5% year-on-year in January against the consensus estimate of 7.3%, bolstered the case for an increase in the US federal funds rate at the next federal open market. Committee meeting (FOMC) on March 15-16, he said.
“Foreign exchange market participants will continue to focus on United States (US) economic data and statements from Federal Reserve (Fed) officials to better understand what may happen at the upcoming FOMC meeting. to get clues about the direction of the market.
“It’s a foregone conclusion that the first rate hike will be in March. Now it’s the question of the quantum of the hike, where a 50 basis point hike seems like an appropriate number,” he said. he declared to Bernama.
Meanwhile, Hong Leong Bank Bhd in a research note said for the week just ended, the greenback traded sideways against the ringgit in a relatively calm week, after trading between 4.1765 and 4.1905 over the last five trading sessions.
“Technical indicators point to a continued trading range in the pair. This, coupled with the lack of new catalysts to drive the ringgit other than the US Dollar factors, reinforces our ‘neutral’ view for the pair in the week ahead,” he added.
On a weekly basis, the ringgit depreciated against the US dollar to 4.1885/1910 from 4.1805/1810 a week ago.
However, the local currency was trading mixed against other major currencies from Friday to Friday.
It rose against the Japanese yen to 3.6089/6111 from 3.6365/6372 on Friday last week and strengthened against the euro to 4.7686/7715 from 4.7929/7935.
The ringgit depreciated against the Singapore dollar to 3.1148/1169 from 3.1096/1102 a week earlier and fell against the pound to 5.6783/6817 from 5.6721/6728 previously. – Bernama