Ringgit seen at 4.72-4.75 against greenback next week amid caution ahead of US rate decision

KUALA LUMPUR: The ringgit is expected to trade cautiously against the US dollar next week as traders look towards the US Federal Reserve’s (Fed) decision on a possible interest rate hike on Nov 2.

SPI Asset Management managing director Stephen Innes said the ringgit-US dollar pair is expected to trade in the 4.72 to 4.75 range next week.

“But we could test the upper bound if the Fed continues to beat the hawkish drum at next week’s US Federal Open Market Committee (FOMC) meeting,” he told Bernama.

Innes said that instead of just focusing on the FOMC, the market should widen its scope of interest as cracks in the Asian financial system are widening.

“The Bank of Korea intervened to stabilise its market on Thursday, while Chinese state-owned banks have sold dollars. These are band-aids to mask the issues and not (fixing) the core problems, leading to demand for US dollars again,” he added.

Innes reckons that the ringgit would be less appealing until the Fed clearly indicates a pivot in its monetary stance and China exits its Covid lockdowns.

On a weekly basis, the ringgit rebounded on Friday against the US dollar to 4.7225/7275 compared with 4.7380/7395 a week earlier.

Against a basket of major currencies, the local note weakened on a Friday-to-Friday basis.

It depreciated against the Singapore dollar to 3.3436/3474 from 3.3144/3157 at the end of last week and slid further against the euro to 4.7008/7058 from 4.6139/6153.

The ringgit fell against the British pound to 5.4455/4513 from 5.2677/2694 and dropped vis-a-vis the Japanese yen to 3.1976/2012 from 3.1384/1396 a week earlier. - Bernama

Source: The Sun Daily

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