Ringgit to trade defensively next week

THE Malaysian ringgit is anticipated to remain defensive next week, trading within a range of 4.41 to 4.45 against the US dollar, supported by Bank Negara Malaysia’s recent decision to maintain its policy stance and the nation’s strong macroeconomic outlook.

Kenanga Investment Bank Bhd stated that a non-farm payroll (NFP) report near 100,000 could bolster expectations for an additional rate cut by the US Federal Reserve (Fed), potentially weakening the US dollar and providing support for the ringgit, Bernama quoted today.

"Markets are now focusing on Europe, where effective fiscal stimulus could reduce the likelihood of further rate cuts by the European Central Bank (ECB), altering the Fed-ECB monetary policy divergence and strengthening the euro," the bank said in a research note.

They also noted that retaliatory actions from Canada and Mexico, along with potential tariff delays, may prolong market uncertainty and keep the US Dollar Index (DXY) range-bound. "US payrolls data on Friday and next week’s inflation report will be crucial market drivers," it added.

For the week ending Friday, the ringgit saw a 0.4% gain against the US dollar but weakened against other major currencies, largely due to a softer US dollar, as reflected by the decline of the DXY.

The local currency, initially under pressure at around 4.47 per US dollar, broke below key support levels and has since been trading around 4.43. The ringgit ended the week at 4.4110/4145 against the greenback, strengthening from 4.4600/4650 the previous week.

However, the ringgit depreciated against several major currencies. It weakened against the British pound, falling to 5.7070/7115 from 5.6174/6237, and slipped against the Japanese yen to 2.9909/9935 from 2.9682/9717. Additionally, the ringgit declined against the euro to 4.7903/7941 from 4.6362/6414.

The ringgit also traded lower against ASEAN currencies, depreciating against the Indonesian rupiah to 270.6/271.0 from 268.7/269.1, and falling versus the Thai baht to 13.1124/1290 from 13.0455/0670.

It weakened against the Singapore dollar to 3.3185/3214 from 3.3069/3108, and eased against the Philippine peso to 7.71/7.73 from 7.69/7.70. - March 8, 2025