Kuala Lumpur: The ringgit is expected to trade cautiously against the US dollar in the upcoming week, maintaining a range between RM4.37 and RM4.38, as the market anticipates the US Federal Open Market Committee (FOMC) meeting. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid shared this outlook, noting that the consensus predicts no change in the Fed Funds Rate.

According to BERNAMA News Agency, the economist highlighted that market participants will also closely watch the US personal consumption expenditures (PCE) data for December 2024. He mentioned potential indications of a pause in aggressive monetary policy, as US President Donald Trump has shown a preference for lower interest rates, which could ease tensions between the White House and the Federal Reserve.

“My sense is that there could be a breather, as indications from US President Donald Trump suggest a less hawkish stance for now. The fact that he favours interest rate cuts would ease tensions between the White House and the Fed, making the central bank’s task more manageable,” Dr. Mohd Afzanizam commented.

The ringgit reached its highest level in nearly three months against the US dollar on Friday, following Trump’s softened approach on China tariffs and his inclination towards lower interest rates. On a Friday-to-Friday basis, the ringgit appreciated to 4.3750/3800 from 4.5040/5085 a week earlier.

In addition, the local currency showed strength against a basket of major currencies. It appreciated against the British pound, Japanese yen, and euro, while also trading higher against several ASEAN currencies, including the Thai baht, Singapore dollar, Indonesian rupiah, and Philippine peso.