KUALA LUMPUR, Feb 12 ― The ringgit is expected to trade in a tight range with downside bias at between 4.18 and 4.19 against the US dollar next week.

The local unit will largely be US dollar driven as the market continues to digest domestic and global economic data.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit moved in a narrow range last week and the trend is expected to continue despite the better-than-expected gross domestic product (GDP) performance in the fourth quarter of 2021 announced on Friday, which came in at 3.6 per cent versus consensus estimates of 3.1 per cent.

Meanwhile, the US consumer price index (CPI) which stood at 7.5 per cent year-on-year in January against the consensus estimate of 7.3 per cent has bolstered the case for a hike in the US Fed Funds Rate in the upcoming Federal Open Market Committee (FOMC) meeting on March 15-16, he said.

“The foreign exchange players will continue to zoom in on the United States (US) economic data and statements by the Federal Reserve (Fed) officials in order to gain further insight on what may happen at the next FOMC meeting for clues of the market direction.

“It is a foregone conclusion that the first rate lift off will happen in March. Now its the question of quantum of the hike whereby 50-basis point increase seems to be an appropriate number,” he told Bernama.

Meanwhile, Hong Leong Bank Bhd, in a research note said for the week just-ended, the greenback traded sideways against the ringgit in a comparatively uneventful week, after having moved within 4.1765 to 4.1905 in the past five trading sessions.

“The technical indicators point to continuous range trading in the pair. This, coupled with lack of fresh catalysts to drive the ringgit other than the US dollar factors, reinforces our 'Neutral' view on the pair in the week ahead,” it added.

On a weekly basis, the ringgit depreciated versus the US dollar to 4.1885/1910 from 4.1805/1810 a week ago.

However, the local currency traded mixed against other major currencies on a Friday-to-Friday basis.

It appreciated vis-a-vis the Japanese yen to 3.6089/6111 from 3.6365/6372 on Friday last week and strengthened versus the euro to 4.7686/7715 from 4.7929/7935.

The ringgit depreciated against the Singapore dollar to 3.1148/1169 from 3.1096/1102 a week earlier and eased against the British pound to 5.6783/6817 from 5.6721/6728 previously. ― Bernama