Ringgit seen to trade on downward bias next week

KUALA LUMPUR – The ringgit is likely to trade on a downward bias against the US dollar next week due to the possibility of the United States (US) Federal Reserve (Fed) raising interest rates.

Juwai IQI global chief economist Shan Saeed said the Fed’s hawkish stance to emphasise on higher interest rates will likely continue for some time to contain inflation in the US.

“However, ringgit is going to hold its ground due to the turnaround of commodities as macro fundamentals are still intact.

“Trade numbers are strong and overall macroeconomic stability is in the market,” he told Bernama.

Last Tuesday, the Fed reiterated its thoughts suggesting the trend toward higher interest rates would continue at the next meeting amid signs that the world’s largest economy’s inflation has not shown any downward trend.

Meanwhile Putra Business School economic analyst Associate-Professor Ahmed Razman Abdul Latiff said the ringgit is likely to trade within the 4.4800-4.4900 range against the US dollar next week.

For the week just ended, the ringgit was traded mostly lower against the US dollar after the greenback hit a 20-year high against major currencies amid declining oil prices following worries over China’s economy.

On Friday, the ringgit weakened against the greenback to 4.4855/4870 compared with 4.4655/4675 a week earlier.

The local note traded mostly higher against a basket of major currencies.

It surged against the Japanese yen to 3.1950/1963 from 3.2619/2636 previously, improved against the British pound to 5.1888/1906 from 5.2831/2855, appreciated against the Singapore dollar at 3.1996/200 from 3.2140/2159 last week.

However, the local unit depreciated versus the euro to 4.4873/4888 from 4.4668/4688 a week earlier. – Bernama / pic Muhd Amin Naharul