KUALA LUMPUR – The ringgit is expected to trade in cautious mode against the US dollar next week as traders seek fresh leads on more significant economic data.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the focus would be on the United States Consumer Price Index (CPI) and Malaysia’s third quarter (3Q 2023) gross domestic product (GDP) data, which will be announced on November 14 and 17, respectively.
“The advance estimates released last month showed that the Malaysian economy has been growing at a decent rate of 3.3% after slowing to 2.9% in the prior quarter.
“Having said that, we believe the ringgit will continue to hover around RM4.70 next week as markets await more evidence of a possible shift in the US Federal Reserve’s (Fed) monetary stance,” he said.
Meanwhile, in a note, Kenanga Investment Bank Bhd said that next week, the US CPI data will be scrutinised to assess the Fed’s progress in controlling inflation.
“Any below consensus reading is expected to diminish the Fed’s hawkish narrative, benefitting the ringgit.
“Also, the unlikelihood of a US government shutdown by November 17, coupled with the potential for an upside surprise in Malaysia’s 3Q 2023 GDP reading, may also help to boost the local note,” it said.
On a Friday-to-Friday basis, the ringgit appreciated against the US dollar to 4.7065/7105 from 4.7265/7320 a week earlier.
The local unit has appreciated against most major currencies.
It increased against the euro to 5.0232/0275 from 5.0318/0377 a week ago, improved versus the Japanese yen to 3.1072/1101 from 3.1445/1484 and strengthened vis-a-vis the British pound to 5.7480/7529 from 5.7734/7801 a week earlier.
The ringgit was also traded higher against its Asean peers.
It gained against the Singapore dollar to 3.4599/4631 from 3.4713/4756 last week and inched up against the Indonesian rupiah to 299.8/300.2 from 300.5/300.9.
The local note was also higher against the Philippine peso to 8.41/8.42 from 8.42/8.44 and improved against the Thai baht to 13.1108/1267 from 13.2332/2553 at the previous Friday’s close. – November 11, 2023