Ringgit to trade at 4.21-4.22 against US dollar next week

KUALA LUMPUR • The ringgit is expected to remain in a narrow band at 4.21 to 4.22 against the US dollar next week on mixed market sentiments, said an economist.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the latest US initial jobless claims which fell to184,000 last week against consensus estimates of 215,000 indicated that the labour market in that county is really on the mend.

“This suggests that demand-induced inflation in the US could be quite visible, implying that the US Federal Reserve (Fed) may need to up their game with respect to removing the monetary policy accommodation,” he told Bernama.

He said, as such, all eyes will be on the Federal Open Market Committee (FOMC) meeting on Dec 14-15 next week.

“Should the Fed maintain their tact, it might give a boost to the US dollar as the narratives over earlier interest rate hike could gain more traction as we usher in the new year,” he added.

Throughout this week, the ringgit traded mostly higher against the greenback on improved sentiment in the local currency and concerns over the Omicron variant subsided somewhat.

On a weekly basis, the local note was higher versus the greenback at 4.2100/2150 from 4.2290/2320 at Friday’s close.

The local unit also appreciated against other major currencies compared to the previous Friday.

The ringgit rose against the Singapore dollar to 3.0815/0854 from 3.0844/0870 a week earlier and strengthened against the euro to 4.7497/7554  from 4.7771/7805 previously.

It improved against the Japanese yen to 3.7034/7081 from 3.7316/7346 last week and strengthened vis-a-vis the British pound to 5.5576/5642 from 5.6182/6222 previously.