KUALA LUMPUR: The ringgit is expected to continue its uptrend against the US dollar next week on the back of positive sentiment ahead of the release of macroeconomic data, an analyst said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid opined that investors' focus will be on Malaysia's gross domestic product (GDP) data for the second quarter (2Q) of 2024 due next Friday.
Apart from that, he said the United States (US) consumer price index (CPI) for July due on Wednesday will also be the key highlight, with a consensus estimate pencilling in 2.9 per cent after moderating at 3.0 per cent in June.
"It appears that the ringgit against the US dollar might want to test its immediate support level of 4.40 next week given the positive vibes in the market," he told Bernama.
On the other hand, Kenanga Investment Bank Bhd (Kenanga IB) in its ringgit weekly outlook noted that despite the ringgit's bullish momentum, the greenback might regain its safe-haven appeal.
This is due to the lower-than-expected US weekly initial jobless claims, coupled with anticipation of a better US CPI next week that could temper expectations for aggressive rate cuts.
"Our projection remains for two rate cuts by the US Federal Reserve, particularly given the political and geopolitical risks on the horizon.
"This environment may cause the ringgit to fluctuate between 4.45 and 4.55 against the greenback in the coming weeks, with the local currency continuing to benefit from favourable domestic macro," it added.
For the week just ended, the ringgit has been trading firmly since the beginning when it climbed to touch the 4.4000 level against the US dollar on Monday, fuelled by a disappointing US jobs report in July.
The local note then corrected as the US Dollar Index rebounded mid-week, before ending the week on a stronger note.
On a Friday-to-Friday basis, the ringgit appreciated to 4.4200/4280 against the US dollar from 4.4945/4995 a week ago, and also moved higher against a basket of other major currencies.
The local note rose versus the euro to 4.8253/8340 from 4.8635/8689, appreciated against the British pound to 5.6373/6475 from 5.7264/7328 and strengthened vis-a-vis the Japanese yen to 3.0019/0075 from 3.0177/0214 a week earlier.
Additionally, the ringgit was mostly higher against ASEAN currencies.
It increased vis-a-vis the Singapore dollar to 3.3381/3444 from 3.3750/3793 and went up versus the Thai baht to 12.5234/5514 from 12.7093/7284 last Friday.
The local note also improved against the Philippine peso to 7.71/7.73 compared with 7.73/7.75 a week earlier but declined versus the Indonesian rupiah to 277.5/278.2 from 277.4/277.8 previously.
-- BERNAMA