Kuala Lumpur: The ringgit is expected to trade cautiously against the US dollar next week ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes on February 20. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted that traders and market participants would closely assess the US Federal Reserve’s stance on easing monetary policy this year.

According to BERNAMA News Agency, Dr. Mohd Afzanizam opined that the Fed is not in a hurry to reduce the Fed Fund Rate (FFR) in the near future. This is because the prevailing FFR remains restrictive, with the Fed aiming to steer the inflation trajectory towards its two percent target, especially after US inflation data exceeded expectations.

US headline inflation and the core consumer price index saw increases of 3.0 percent and 3.3 percent, respectively, in January. Dr. Mohd Afzanizam noted that the local note might test the immediate support level of RM4.43 next week.

For the week just ended, the ringgit fluctuated between gains and losses amid concerns over policy uncertainties under US President Donald Trump. Despite this, it rebounded from oversold levels and concluded the week higher, buoyed by Malaysia’s strong 2024 gross domestic product performance. On a Friday-to-Friday basis, the ringgit appreciated to 4.4310/4385 from 4.4375/4420 the previous week.

Meanwhile, the local currency was mostly lower against major currencies. It weakened against the British pound to 5.5769/5863 from 5.5278/5334 and slipped against the euro to 4.6437/6515 from 4.6101/6148. However, it strengthened against the Japanese yen to 2.9048/9099 from 2.9217/9249.

The ringgit also fell against most ASEAN currencies. It declined against the Indonesian rupiah to 272.6/273.2 from 272.4/272.9 and weakened against the Singapore dollar to 3.3055/3113 from 3.2866/2901. It also edged down against the Philippine peso to 7.66/7.68 from 7.65/7.66. However, the local note rose against the Thai baht to 13.1761/2059 from 13.1853/2041.