KUALA LUMPUR, July 30 — The ringgit is expected to trade in a tight range with an upward bias against the US dollar next week on improving risk sentiment for the local currency, said an analyst.
SPI Asset Management managing partner Stephen Innes said the ringgit may have traded more favourably in line with the general weakness of the US dollar amid growing recession concern.
Innes noted that for the upcoming week, investors will focus on the United States (US) Non Farm Payroll data which is set to be out on Friday where investors are actually hoping for a bit of weakness.
“With the Federal Reserve (Fed) currently in data dependent mode, bad news could be good for risk sentiment as it could encourage the Fed to ease back on the rate hike quantum,” he told Bernama.
On Thursday, the Fed announced a 75 basis point interest rate hike, taking its benchmark rate to a range of 2.25 — 2.50 per cent, while its chairman Jerome Powell said there will be a point where the Fed starts to slow hikes to assess their impact.
Meanwhile, the latest US economic data showed its gross domestic product (GDP) contracted by 0.9 per cent in the second quarter of 2022.
Looking at current sentiment, Innes said the ringgit is likely to trade within the 4.4375-4.4575 range against the US dollar next week.
For the week just ended, the ringgit was traded mixed against the US dollar as traders remained in cautious mode ahead of the US economic data release and market volatility.
On Friday, the ringgit strengthened against the greenback to 4.4495/4520 compared with 4.4515/4545 a week earlier.
The local note, however, traded lower against a basket of major currencies on a Friday-to-Friday basis.
It depreciated against the Singapore dollar at 3.2243/2266 from 3.2011/2038 last week and eased against the Japanese yen to 3.3347/3368 from 3.2389/2413 previously.
The local unit weakened against the British pound to 5.4048/4078 from 5.3187/3222 a week earlier and went down versus the euro to 4.5385/5410 from 4.5201/5231. — Bernama
