KUALA LUMPUR – The ringgit is expected to trade range-bound against the US dollar next week as investors await the upcoming Bank Negara Malaysia policy meeting on Thursday, said an analyst.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said as investors await financial signals from the meeting, the local note will likely trade between RM4.15 and RM4.16 against the greenback.
“Nevertheless, the US Federal Reserve is likely to announce the tapering of its asset purchases in November and begin the process a month later,” he said, adding that the timeline to raise the federal funds rate would take longer, as mentioned by Fed chairman Jerome Powell.
Hence, he said it should somewhat limit the strengthening of the US dollar, which is good for the ringgit.
For the week just ended, the local note was traded mixed throughout the week due to worries over tapering by the US Fed and new daily Covid-19 cases in Malaysia, as well as caution ahead of the release of the US non-farm payroll data.
The number of new Covid-19 cases recorded in Malaysia dropped to 19,378 yesterday, compared with 20,988 on Thursday, bringing the cumulative number of cases to 1,805,382 infections.
On a weekly basis, the ringgit strengthened to 4.1445/1475 against the greenback yesterday from 4.1890/1930 a week ago.
The ringgit also traded higher against other major currencies compared with a week earlier.
It climbed against the Singapore dollar to 3.0876/0903 from 3.1009/1041 a week before and rose against the British pound to 5.7352/7393 from 5.7427/7482 previously.
The local note also widened against the euro to 4.9195/9231 from 4.9254/9301 and advanced on the Japanese yen to 3.7705/7735 from 3.8044/8084 on the previous Friday. – Bernama, September 4, 2021
