KUALA LUMPUR: The ringgit is likely to trade in the same range of around RM4.78 against the US dollar this week, as the situation in the Middle East will continue to be under scrutiny by investors, says an analyst.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said any form of escalation in tension would result in a higher demand for the US dollar.
“On that note, the ringgit should stay within the prevailing level this week,” he told Bernama.
At the same time, he said markets would be watching for the Federal Reserve’s favourite inflation gauge, the personal consumption expenditures price index.
“It seems that the interest cut thesis is losing its appeal as inflation is expected to stay elevated in line with a steady labour market condition,” he noted.
Meanwhile, Kenanga Research said stable growth prospects and authorities’ continued support might help keep the ringgit stable.
Technically, it said US dollar/ringgit was expected to turn neutral-to-bearish this week, with the pair expected to trade near its five-day exponential moving average of 4.78.“The local note could strengthen against the US dollar if risk sentiment improves, with immediate support at 4.781,” it said.
On April 15, Bank Negara said the central bank stood ready to deploy the tools at its disposal to ensure that the Malaysian financial markets remain orderly and continue to function efficiently in light of the current geopolitical situation.
