KUALA LUMPUR: The Malaysian ringgit is expected to remain within a narrow trading band against the US dollar in the coming week, as investors adopt a cautious stance ahead of key global central bank decisions, particularly the upcoming Federal Open Market Committee (FOMC) meeting scheduled for 17–18 June.
Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, indicated that the ringgit is likely to fluctuate between 4.22 and 4.24 against the greenback, driven by investor anticipation of the US Federal Reserve’s updated quarterly economic projections.
“Market focus will centre on the Fed’s quarterly forecast, especially its outlook on the Fed Funds Rate for the rest of the year,” he told Bernama.
Aside from the Fed, several other central banks are slated to meet during the same period, including the Bank of England, the Bank of Japan, and the People’s Bank of China. Additionally, regional central banks such as Bank Indonesia and Bangko Sentral ng Pilipinas are also scheduled to deliberate on monetary policy.
Dr Afzanizam noted that global interest rates are generally on a downward trajectory, reflecting the growing strain on global economic growth due to continued tariff-related shocks.
Meanwhile, geopolitical tensions added fresh volatility to the markets. Israel’s strikes on Iran’s nuclear sites led to a temporary spike in Brent crude prices, which surged to US$78.22 per barrel before easing back to US$73.56. Concurrently, the US Dollar Index climbed 0.31% to reach 98.228 points.
“Geopolitical developments took centre stage on Friday, providing a short-term boost to the US dollar,” he said. Market observers have warned that the escalation of military conflict between Israel and Iran could lead to a further strengthening of the greenback. The Federal Reserve’s policy response will be instrumental in determining the trajectory of the dollar moving forward.
During the week in review, the ringgit reversed earlier gains, pressured by rising geopolitical risk and renewed demand for the US dollar as a safe-haven asset. The local unit ended the week lower at 4.2435/2480 versus the US dollar, compared to 4.2270/2360 the previous Friday.
The ringgit also traded weaker against a range of major and regional currencies. Against the Japanese yen, it eased to 2.9448/9482 from 2.9324/9390, while it slipped to 5.7482/7543 against the British pound, down from 5.7212/7334. The local note also depreciated against the euro, ending at 4.8906/8958 compared to 4.8268/8371 previously.
In the ASEAN region, the ringgit posted broad-based declines. It weakened to 3.3077/3118 against the Singapore dollar from 3.2862/2934, fell to 260.2/260.6 against the Indonesian rupiah from 259.5/260.2, and slipped to 13.0807/1018 versus the Thai baht from 12.9599/9947. It remained unchanged at 7.55/7.56 against the Philippine peso.
-Bernama
