KUALA LUMPUR: The ringgit is likely to hold up better against G10 currencies next week except the US dollar next week following a revised lower growth forecast and higher inflation rate by the European Central Bank (ECB).
SPI Asset Management managing director Stephen Innes said the ringgit is expected to continue to weaken against the greenback following the strengthening of the US dollar ahead of the United States (US) Federal Reserve (Fed) meeting next week on Sept 19-20.
He said that the Fed's policymakers are expected to disclose their short-term interest rate forecasts for the end of 2023.
"Besides, there's a growing sense of optimism among a cohort of investors who believe that Beijing's recent initiatives to stimulate the economy and stabilise financial markets are showing signs of success, which could provide a lifeline for the ringgit if future data builds on this trend.
"However, China's property market remains a huge concern for exporting countries into China, like Malaysia," he told Bernama.
Overall, Innes said the primary factors contributing to the ringgit weakness would include the US interest rate and the sluggish Chinese and European economic growth, both of which were raising export recession concerns for Asian economies.
"Thus, this will drive the safe-haven demand such as the US dollar. For next week, there is a chance the ringgit will move between the range of 4.67 to 4.69 against the greenback," he said.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the Fed is expected to keep the rate steady at 5.5 per cent at its meeting next week.
"More importantly is their latest quarterly projection on macroeconomic variables. On that note, the ringgit could stay weak as the Fed is expected to remain hawkish in its monetary policy stand.
"As such, the ringgit-US dollar is likely to linger around RM4.66 to RM4.68 next week," he said.
On a Friday-to-Friday basis, the ringgit weakened against the US dollar at 4.6815/6845 from 4.6745/6795 a week earlier.
The local unit, however, traded higher against other major currencies.
It appreciated against the British pound to 5.8196/8233 from 5.8352/8414 the previous Friday, rose versus the euro to 4.9919/9951 from 5.0031/0085 and was higher vis-a-vis the Japanese yen to 3.1670/1693 from 3.1741/1777 from previously.
The ringgit traded mixed against its Asean peers.
The local unit eased against the Singapore dollar to 3.4350/4374 from 3.4277/4312 a week earlier but strengthened against the Thai baht at 13.0681/0812 from 13.1591/1787 last Friday.
It fell vis-a-vis the Philippine peso to 8.24/8.25 from 8.21/8.22 last week but slightly better versus the Indonesian rupiah to 304.8/305.2 from 304.9/305.4.
– BERNAMA
TAGS: Ringgit, US dollar, Stephen Innes, Mohd Afzanizam Abdul Rashid, Fed, G10, currencies