KUALA LUMPUR, Feb 10 — The ringgit is expected to trade range-bound amid in a cautious mode, hovering around the RM4.76 level with an upside bias against the US dollar next week, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit had been in an oversold position for some time and a long overdue technical correction is expected to emerge to lift the currency slightly higher.

He noted that issues surrounding the timing for the United States (US) rate cut and the anticipation for a forceful China economic stimulus will continue to drive market sentiments.

Advertisement

Next week, the key focus will be the US consumer price index (CPI), which will be released on Tuesday, and Malaysia’s fourth quarter (4Q) 2023 gross domestic product (GDP) announcement on February 16, he shared.

“We opine that the final quarter GDP of 2023 would be fairly the same as the advance estimates of 3.4 per cent, bringing the full year 2023 growth to 3.8 per cent. Malaysia’s GDP for this year is likely to be better than 2023 on account of improvement in net exports and domestic demand.

“The latest assessment of the government’s economic outlook this year will be unveiled through the announcement of GDP for 4Q 2023. So, the market is going to be cautious,” he told Bernama.

Advertisement

Mohd Afzanizam added the market will also monitor the US CPI data and if it is higher than expected, it would strengthen the narrative to increase interest rates.

For the week just ended, the local note was traded mixed while weighing on various US economic data to gauge the US interest rate path as well as expectations of China’s huge stimulus package.

On a Friday-to-Friday basis, the ringgit was traded lower against the US dollar at 4.7595/7705 compared to 4.7155/7185 a week earlier.

However, the local unit was traded higher against other major currencies.

It rose vis-a-vis the Japanese yen to 3.1849/1925 from 3.2142/2164 a week earlier, increased against the British pound to 6.0017/0156 from 6.0160/0199 and appreciated versus the euro to 5.1241/1359 versus 5.1352/1384 previously.

The ringgit was traded mostly lower against a few Asean currencies.

It eased versus the Singapore dollar to 3.5342/5429 from 3.5309/5334 a week ago and fell against the Indonesian rupiah to 304.3/305.2 compared to 301.0/301.4 previously.

The ringgit slipped against the Philippine peso to 8.51/8.55 from last week’s closing rate of 8.43/8.44 but advanced against the Thai baht to 13.2540/2902 from 13.3735/3873 last Friday. — Bernama