Kuala lumpur: The ringgit is expected to continue trading within a tight range with an upward bias next week, as investors reassess the trading trend following the United States (US) interest rate cuts. SPI Asset Management managing director Stephen Innes highlighted that next week will see relatively little US top-tier economic data, with Tuesday’s US Manufacturing Purchasing Managers’ Index (PMI) being a key macroeconomic indicator to watch.
According to BERNAMA News Agency, the release of the US second quarter (2Q) of 2025 gross domestic product (GDP) data next week will be closely monitored for signs of economic momentum and its potential implications on the Federal Reserve’s (Fed) policy path. Innes mentioned that market trends could also be influenced by speeches from Fed officials. If their tone is more dovish than Fed Chair Jerome Powell’s careful script, it could lead to a moderation of the dollar and a subsequent strengthening of the ringgit.
In the meantime, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid suggested that emerging market currencies, including the ringgit, could gain further traction if traders and investors sense that the Fed might be lagging in its policy adjustments. He noted that the Fed appears to be on track with its monetary policy, adding that the ringgit might remain above 4.20 per dollar in the short term.
On a weekly basis, the ringgit ended the week slightly weaker against the US dollar, closing at 4.2040/2115 compared to 4.1975/2080 previously. The ringgit traded mostly lower against a basket of major currencies, depreciating against the Japanese yen to 2.8419/8471 from 2.8373/8446 and weakening versus the euro to 4.9447/9536 from 4.9203/9326. However, it gained against the British pound to 5.6775/6876 from 5.6864/7006.
The ringgit showed mixed performance against its ASEAN peers. It was slightly lower against the Singapore dollar at 3.2744/2805 from 3.2719/2803 at the end of last week and slipped against the Philippine peso to 7.36/7.38 from 7.35/7.37. Conversely, the local unit rose against the Indonesian rupiah to 253.2/253.8 from 256.3/257.0 and strengthened against the Thai baht to 13.1973/2271 from 13.2317/2703 in the previous week.