KUALA LUMPUR: The ringgit is likely to trade in a narrow range of RM4.70 and RM4.71 against the US dollar in cautious trading next week even as the greenback may slacken following the softer United States Personal Consumption Expenditures (PCE) data announcement.
Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, despite the cooling inflation, the US Federal Reserve (Fed) is expected to maintain the current interest rate.
"A hawkish stance by the US Federal Reserve is likely to limit any potential upside for the ringgit next week," he told Bernama.
"Consensus among financial analysts, economists and market participants have predicted that the PCE Price Index will decrease from 2.7 per cent to 2.6 per cent," he added.
The US monthly core PCE, excluding volatile food and energy items, for May 2024 reportedly increased by 0.1 per cent from the prior month, bolstering the case for the Fed to cut interest rates later this year.
The US Federal Open Market Committee's (FOMC) next meeting is scheduled for the end of July.
Meanwhile, in another development, Mohd Afzanizam said the positive assessments by Fitch Ratings on Malaysia's sovereign credit ratings indicated that economic reforms have positively impacted Malaysia's fixed income market.
On Thursday, Fitch Ratings maintained Malaysia's sovereign credit ratings at BBB+ with a 'stable' outlook, underpinned by a diversified economy and export base.
Its Asia-Pacific sovereigns associate director, Kathleen Chen, said strong medium-term growth prospects, as well as current account surpluses, also support the rating strength.
On a Friday-to-Friday basis, the ringgit marginally depreciated to 4.7160/7190 against the US dollar from 4.7110/7145 a week ago.
The ringgit was traded mostly lower against a basket of other major currencies.
The local note declined against the British pound to 5.9639/9676 from 5.9594/9638 on Friday last week, lower versus the euro to 5.0494/0526 from 5.0394/0431 but gained vis-a-vis the Japanese yen to 2.9345/9365 from 2.9648/9671 a week earlier.
The ringgit was traded lower against Asean currencies.
It went down against the Philippine peso to 8.05/8.05 compared with 8.00/8.02 a week earlier, eased versus the Indonesian rupiah to 287.9/288.3 from 286.3/286.7, edged down vis-a-vis the Singapore dollar to 3.4792/4816 from 3.4785/4814, and slipped versus the Thai baht to 12.8508/8646 from 12.8495/8639 on Friday last week.