Kuala lumpur: The ringgit is likely to trade higher as investors remain constructive towards the local note, aiming to break the 4.00-level again next week. On Friday, the ringgit broke through the key psychological level of 4.00 against the US dollar, touching an over seven-year high of 3.9992.

According to BERNAMA News Agency, this also marks the Malaysian currency's strongest level in more than seven years, which was last seen on June 18, 2018, at 3.9960/9990. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that investors would also shift their focus towards the Federal Open Market Committee (FOMC) meeting on January 27-28. He mentioned that it is likely the United States Federal Reserve (Fed) would keep the rate steady, while the latest assessment of the economic condition remains crucial.

Meanwhile, Kenanga Investment Bank Bhd expects the ringgit to trade in the 4.04-4.05 range next week, provided the FOMC meeting outcome is hawkish, which would push the US dollar index higher. The bank's research note indicated that the overnight US data and the recent sell-off in bonds and equities have done little to alter market pricing of the Fed's next move. Their base case remains two cuts this year, more likely starting in the first half of 2026 rather than concentrated at year-end, as incoming data ahead of the March FOMC should support an earlier move.

The ringgit ended the week sharply higher against the US dollar, strengthening on a week-on-week basis to close at 4.0045/0080, compared with 4.0555/0605 last Friday. The ringgit traded higher against a basket of major currencies this week, strengthening against the Japanese yen, appreciating versus the euro, and appreciating vis-a-vis the British pound. The ringgit also traded firmer against its ASEAN peers.