KUALA LUMPUR, Nov 7 – The ringgit may strengthen slightly against the US dollar next week as investors assess the latest economic data and interest rate outlook in the United States.
However, global market uncertainty and geopolitical risks could limit the local currency’s gains.
US Inflation Data in Focus
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said investors will closely monitor the US Consumer Price Index (CPI) and Producer Price Index (PPI) for October.
The United States will release the two inflation reports on Tuesday and Friday, respectively.
According to Mohd Afzanizam, lower inflation could put pressure on US Treasury yields and the US dollar. As a result, the ringgit could receive some support.
However, higher-than-expected inflation may strengthen the US dollar and limit the ringgit’s progress.
Investors will also assess Malaysia’s industrial production, labour market and wholesale and retail trade figures. These indicators will provide further insight into the country’s economic performance.
Ringgit Expected to Trade Between RM4.04 and RM4.06
Mohd Afzanizam said Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate (OPR) at 2.75% provides a stable and consistent monetary policy outlook.
Nevertheless, investors may remain cautious while waiting for the latest US employment report and developments in US policy following the midterm elections.
Geopolitical risks could also influence market sentiment.
Based on these factors, he expects the ringgit to trade between RM4.04 and RM4.06 against the US dollar next week.
Global Markets Could Influence Ringgit Performance
Meanwhile, SPI Asset Management managing partner Stephen Innes said the ringgit could strengthen further if selling pressure in global equity markets increases.
Such a move could lead investors to expect that the US Federal Reserve may avoid raising interest rates.
However, Innes warned that oil prices and global stock market performance could determine the ringgit’s next direction.
If crude oil prices remain high and global equities continue to face selling pressure, particularly in semiconductor stocks, the ringgit may struggle to make further gains.
Therefore, investors will closely watch Wall Street and the oil market for clearer signals.
Innes expects the ringgit to trade within a narrower range of RM4.045 to RM4.065 against the US dollar.
Ringgit Records Mixed Performance Against Other Currencies
On a Friday-to-Friday comparison, the ringgit edged lower against the US dollar to RM4.0565/0610 from RM4.0555/0600 a week earlier.
However, the local currency gained against several major currencies.
It strengthened against the Japanese yen to 2.5616/5646 from 2.5782/5812. It also improved against the British pound to 5.4304/4365 from 5.4461/4522.
Meanwhile, the ringgit rose against the euro to 4.5315/5365 from 4.5413/5464.
Against ASEAN currencies, the ringgit recorded mixed results. It strengthened against the Singapore dollar to 3.1657/1694 from 3.1753/1791.
However, it weakened against the Indonesian rupiah, Thai baht and Philippine peso.
Overall, investors will continue to monitor inflation data, interest rate expectations and global market developments as they assess the ringgit’s outlook for the coming week.
Source : BERNAMA | Rewritten By Minutesmy
