Ringgit likely to remain soft versus US dollar next week

KUALA LUMPUR • The ringgit is expected to remain soft against the US dollar next week, driven by bearish outlook on the global economic front, said an analyst.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said talks of impending economic slowdown going forward are expected to continue to take a centre stage.

“A series of Purchasing Managers Index (PMI) reports will be released next week and consensus estimates indicate that sentiments among businesses are expected to moderate further.

“At the current juncture, the resistance level for the US dollar against ringgit is located at 4.45. Given the current uncertainties, it might flirt around such level should concerns over the global economic recession intensify,” he told Bernama.

For the week just-ended, the ringgit was traded mixed against the US dollar amid concern over the possible interest rate hike by central banks around the world to curb rising inflation.

The United States Federal Open Market Committee (FOMC) meeting this week came out with a surprise, which saw the US Federal Reserve (Fed) decide to raise its interest rates by 0.75 per cent to a range of 1.50-1.75 per cent.

According to a dealer, the persistently high inflation compelled the central bank to deliver its biggest hike at a single meeting since 1994.

The move was then followed by central banks across Europe, which raised their interest rates on Thursday and signalled at even higher borrowing costs to come to tame soaring inflation that is eroding savings and squeezing corporate profits.

On a weekly basis, the ringgit was almost flat against the greenback at 4.4000/4040 on Friday compared with 4.4000/4030 a week earlier.

The local note was traded higher against a basket of major currencies on a Friday-to-Friday basis. 

The ringgit was higher against the Singapore dollar to 3.1753/1786 from 3.1856/1880 a week earlier and rose vis-a-vis the Japanese yen to 3.2655/2688 from 3.2870/2895 previously.

It appreciated against the euro to 4.6314/6357 from 4.6618/6650 and strengthened versus the British pound to 5.4208/4257 from 5.4784/4822 last week. — Bernama / pic TMR