Ringgit likely to see range-bound trading next week ahead of FOMC meeting

The ringgit is expected to trade range-bound next week as investors remained cautious ahead of the United States Federal Open Market Committee (FOMC) meeting, said an analyst. 

SPI Asset Management managing director Stephen Innes believed the investors were worried about the global economic outlook and that China’s reopening might not offset global recession concerns.

“In my view, the good news is that the US inflation expectations are falling, and next week’s Consumer Price Index (CPI) could very well support that view if it comes out softer, which could accelerate the US dollar sell-off,” he told Bernama. 

However, he said more positive follow-through is likely to be seen after the release of US CPI data and as the Federal Reserve downshift to 50 basis points next week.

“This will likely support the ringgit to trade between the range of 4.3850 and 4.4150,” he said.

For the week just ended, the local note was traded mostly lower throughout the week due to growing concern on surging Omicron cases in China, worries about the global economic outlook as well as caution ahead of the FOMC meeting next week. 

On a week-on-week basis, the ringgit fell against the US dollar to 4.4010/4080 on Friday from 4.3835/3925 on the previous Friday. 

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

It depreciated against the Singapore dollar to 3.2545/2601 from 3.2463/2535 from last Friday, lower against the euro at 4.6466/6540 from 4.6136/6231 and was weaker against the British pound at 5.3908/3994 from 5.3781/3892.

However, it was stronger vis-a-vis the Japanese yen to 3.2315/2369 from 3.2698/2768 a week before.  — BERNAMA