Kuala lumpur: The ringgit is expected to trade cautiously against the US dollar next week as market sentiment continues to be shaped by developments in the Middle East, while investors will also keep a close watch on the trajectory of crude oil prices and upcoming US economic data.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted that the focus will continue to be on the Middle East conflict.
He emphasized that while important data points like the US Consumer Price Index and personal consumption expenditures for February are on the horizon, their impact may be overshadowed by geopolitical factors. Dr. Mohd Afzanizam noted that "what the market is hoping for is a de-escalation in the conflict, yet that seems to be elusive at the current juncture."
Furthermore, Kenanga Investment Bank Bhd expressed that markets remain attentive to the path of crude prices and their implications for US inflation and Federal Reserve policy. The bank observed that although Malaysia may benefit economically from higher oil prices in the short term, the ringgit no longer acts as a traditional oil proxy and instead trades more like a high beta emerging market currency. Kenanga added, "until investors gain clearer visibility on the conflict's duration, the US dollar should remain supported, keeping the ringgit pressured around 3.94-3.98 per US dollar."
On a week-on-week basis, the ringgit ended the week lower against the US dollar, closing at 3.9425/9535 compared with 3.8910/8960 the previous Friday. The local note traded mostly weaker against a basket of major currencies this week.
Specifically, it edged down versus the Japanese yen to 2.4973/5044 from 2.4930/4963 a week earlier and fell vis-a-vis the British pound to 5.2530/2676 from 5.2470/2538. However, it rose against the euro to 4.5634/5762 from 4.5898/5957 previously.
Meanwhile, the ringgit showed mixed performance compared with its ASEAN peers. The local currency declined against the Singapore dollar to 3.0779/0867 from 3.0742/0784 a week earlier and slipped vis-a-vis the Indonesian rupiah to 232.9/233.6 from 231.7/232.2, but it gained against the Philippine peso to 6.68/6.70 from 6.75/6.76 previously and strengthened versus the Thai baht to 12.3392/3810 from 12.5153/5370.