KUALA LUMPUR, Aug 24 ― The ringgit is expected to remain stuck in a tight range as the market seeks more direction from key US economic data expected to be released next week.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said a series of important economic indicators in the US will be out, including the second preliminary reading of second quarter 2019 gross domestic product data and the Conference Board Consumer Confidence Index.
“This would determine sentiments towards the upcoming Federal Open Market Committee meeting scheduled on Sept 17 and 18,” he told Bernama.
Afzanizam said thus far, US economic indicators have been quite mixed, implying uncertainties over a possible cut in the Federal Funds Rate.
This, he said, would result in a strong dollar as the Fed may not be in a hurry to reduce the rates further.
Meanwhile, VM Markets Pte Ltd managing partner Stephen Innes expects the ringgit to trade with a negative bias within the range of 4.18 to 4.20.
“Unless we get a dovish surprise from the Federal Reserve. The prospect of a stronger dollar amid trade war uncertainty has turned views on the ringgit negative.
“The issue is the stronger greenback is playing into a weaker yuan and this is negative for Asia forex and the ringgit,” he said, adding that the ringgit’s performance would also depend on Fed chair Powell’s policy messaging at the Jackson Hole symposium.
For the week just ended, the local market was mostly lower as investors cautiously awaited the Jackson Hole outcome and developments in the US-China trade war.
The ringgit ended the week weaker at 4.1900/1930 from 4.1760/1810 recorded last Friday.
The local currency also traded lower against most other major currencies.
It was down against the Singapore dollar to 3.0213/0237 from 3.0097/0140 and depreciated versus the Japanese yen to 3.9284/9327 from 3.9230/9288.
The local unit also edged down vis-to-vis the pound to 5.1147/1201 from 5.0763/0828 and dropped against the euro to 4.6333/6383 from 4.6283/6346. ― Bernama