kuala lumpur: The ringgit is likely to hold up better against G10 currencies, except the US dollar, next week following the European Central Bank’s (ECB) downward revision to its growth outlook and higher inflation.
Stephen Innes, managing director of SPI Asset Management, expects the ringgit to continue depreciating against the dollar as the dollar strengthens ahead of the US Federal Reserve’s meeting on September 19-20 next week. said that it has been done.
He said Fed policymakers are expected to release their short-term interest rate outlook through the end of 2023.
“Additionally, there is growing optimism among investor groups who believe that the Chinese government’s recent efforts to stimulate the economy and stabilize financial markets are showing signs of success, and future data suggest that If it builds on this trend, it could be the lifeblood of the ringgit.”
“However, for exporters to China like Malaysia, the Chinese real estate market remains a major concern,” he told Bernama.
Overall, Innes said the main factors behind the weakening of the ringgit were interest rates in the US and slowing economic growth in China and Europe, both of which are raising concerns about an export downturn in Asian economies.
“This will therefore increase the demand for safe-haven assets such as the US dollar. The ringgit is likely to remain in the range of 4.67-4.69 against the dollar next week,” he said.
Meanwhile, Mohd Afzanizam Abdul Rashid, chief economist and head of social finance at Bank Muamarat Malaysia, said the Fed is expected to keep the policy rate unchanged at 5.5% at next week’s meeting.
“More important is the latest quarterly forecast on macroeconomic variables. On that front, the Fed’s monetary policy stance is expected to remain hawkish, so the ringgit weakness may continue.
“Therefore, the ringgit-US dollar exchange rate is likely to remain around 4.66-4.68 ringgit next week,” he said.
From Friday to Friday, the ringgit fell to 4.6815/6845 ringgit against the US dollar, from 4.6745/6795 ringgit the previous week.
However, the local currency traded higher against other major currencies.
Against the British pound, it rose to 5.8196/8233 from 5.8352/8414 on Friday, against the euro it rose from 5.0031/0085 to 4.9919/9951, and against the Japanese yen it rose from 3.1741/1777 last week to 3.1670/1693. Before.
The ringgit traded mixed with ASEAN countries.
The local currency fell against the Singapore dollar to 3.4350/4374 from 3.4277/4312 last week, but rose against the Thai baht to 13.0681/0812 from 13.1591/1787 last Friday.
Against the Philippine peso, it depreciated to 8.24/8.25 from 8.21/8.22 last week, but against the Indonesian rupiah, it improved slightly from 304.9/305.4 to 304.8/305.2. – Bernama