KUALA LUMPUR: The ringgit is likely to trade at the current level of between 4.11 and 4.13 against the US dollar next week, barring any major surprise that would significantly sway global risk sentiment, said a dealer.
FXTM market analyst Han Tan said the market is set to be influenced by broader sentiment surrounding Asian assets, as China will unveil its second-quarter gross domestic product figures along with other key economic indicators on Monday (July 15).
“Given existing concerns over deteriorating global economic conditions, a more pronounced slowdown in the Chinese economy could stoke risk aversion and weigh negatively on Asian currencies, including the ringgit,” he told Bernama.
He said market expectations surrounding the US Federal Reserve’s (Fed) policy decision later this month should feed into the US dollar’s near-term performance.
“Heightened expectations over a larger-than-expected US interest rate cut could further undermine the US dollar while allowing Asian and G10 currencies to post further gains,” he added.
For the week just ended, the ringgit started on a weak note as dollar sentiment improved following the release of solid US jobs data, which lowered investors’ expectations of a Fed interest rate cut.
However, Fed chairman Jerome Powell subsequently said the strong jobs report did not alter his outlook on the economy and interest rates.
On July 9, Bank Negara Malaysia’s decision to maintain the benchmark policy rate at 3% had a relatively muted impact on the local note as the market had largely expected the monetary policy decision.
The ringgit, however, rebounded on Wednesday following the latest signals that the Fed would cut interest rates later this month as well as due to the rise in global oil prices.
On a Friday-to-Friday basis, the ringgit appreciated to 4.1110/1150 from 4.1340/1370 against the US dollar.
The local currency was also traded higher against most other major currencies.
The ringgit rose against the Singapore dollar to 3.0217/0251 from 3.0460/0493 recorded in the preceding Friday and strengthened versus the Japanese yen to 3.7910/7954 from 3.8267/8306.
It also improved against the British pound to 5.1511/1586 from 5.1882/1932 and increased vis-a-vis the euro to 4.6273/6323 from 4.6557/6607.