THE ringgit is expected to trade in a narrower and slightly weaker range of 4.24 to 4.26 against the US dollar next week, with investor attention firmly on upcoming inflation data from the United States.
Bernama cited Chief economist at Bank Muamalat Malaysia Bhd, Dr Mohd Afzanizam Abdul Rashid, saying the focus now centres on whether the US Federal Reserve will move to cut interest rates.
“The key data point to watch will be the US Consumer Price Index (CPI) for June,” he told Bernama.
He noted that inflation remains relatively contained, particularly during the current 90-day tariff reprieve. However, should retaliatory tariffs be fully enforced by 1 August, inflationary pressures may intensify.
“This could make maintaining the current US Federal Funds Rate a more ideal policy decision,” he said.
Afzanizam added that the strengthening US Dollar Index (DXY) may continue to weigh on emerging market currencies, including the ringgit.
Stephen Innes, managing partner at SPI Asset Management, shared a similar outlook, saying the ringgit was likely to trade within a tighter band ahead of the release of the US Producer Price Index (PPI) data next week.
That release, he said, would likely shape market expectations regarding the Fed’s next policy move.
“The market will be watching the month-on-month core CPI figure closely, with 0.3 per cent seen as a key threshold,” Innes explained.
“Any reading below expectations could spark hope of a rate cut in September, potentially denting the US dollar’s appeal and supporting the ringgit,” he said.
However, Innes warned that stronger-than-expected figures—particularly 0.4 per cent or higher—may prompt markets to price in a more hawkish Fed, thereby boosting the greenback.
“In that case, the dollar-ringgit could strengthen towards 4.2700, although any early gains may be short-lived due to profit-taking,” he said.
He forecast the ringgit to trade within a tactical range of 4.2400 to 4.2650, noting that market positioning continues to tighten.
Currently, the ringgit's performance is heavily influenced by macroeconomic developments in the US, he added.
From a Friday-to-Friday basis, the ringgit ended the week weaker against the US dollar at 4.2475/2525, down from 4.2180/2260 the previous week.
However, the local unit strengthened against several major currencies, including the Japanese yen (2.8893/8929 from 2.9225/9282) and the British pound (5.7524/7592 from 5.7601/7710).
It slipped against the euro at 4.9679/9737 from 4.9675/9770 previously.
The ringgit also fell against several ASEAN currencies, including the Singapore dollar (3.3186/3228 from 3.3114/3182), Indonesian rupiah (261.8/262.3 from 260.6/261.2), Thai baht (13.0668/0886 from 13.0302/0609) and Philippine peso (7.52/7.53 from 7.47/7.49). - July 12, 2025
