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Ringgit Outlook: Firm Trend Expected Ahead of US Central Bank Meeting Minutes and Inflation Report
KUALA LUMPUR, May 25 - The Malaysian ringgit is anticipated to maintain its firm position with an upward bias against the US dollar next week, given the upcoming release of US Federal Reserve meeting minutes and the US personal consumption expenditures inflation report.
Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid, posits that the ongoing upward trend of the ringgit will persist due to ongoing concerns over the US fiscal position. According to Bernama, he expects the USD/MYR pair to breach its immediate support level of RM4.2624, with the next resistance level at RM4.0947.
"With a weak US dollar outlook," Dr Mohd Afzanizam stated, "the ringgit may strengthen further."
Ringgit's Performance During the 46th ASEAN Summit
During the 46th ASEAN Summit, which will take place in Kuala Lumpur on May 26-27, the ringgit is expected to trade with a modest uptrend, reflecting broader US dollar weakness and renewed interest in emerging Asian foreign exchange.
SPI Asset Management managing partner Stephen Innes expects the gathering to influence sentiment, provided the policy optics unfold favorably. While policy announcements seldom provide immediate market-moving headlines, investors will keep a close watch on any signs suggesting tighter ASEAN integration, moves toward de-dollarization, or alignment with US trade objectives, according to Innes.
Additionally, Innes suggests that a supportive tone could reinforce Malaysia's position in regional supply chains and digital trade corridors, potentially enhancing confidence in the ringgit. Announcements regarding cross-border digital payment infrastructure, logistics hubs, or energy transition financing could further boost foreign direct investment sentiment and inject short-term bullishness into the ringgit, according to Innes, although such developments would mostly be a narrative rather than concrete capital commitments.
The ringgit ended the week on a high note against the US dollar, closing at 4.2285/2345 on Friday compared to 4.2900/2980 a week earlier. The local note traded lower against a basket of major currencies, except for a slight increase versus the Singapore dollar, Philippine peso, and Indonesian rupiah.
Bernama reported that the ringgit appreciated versus the euro to 4.7985/8053 at Friday's close, but dropped against the Japanese yen and the British pound. The local note also weakened versus the Thai baht.
[Enrichment Data Relevance: Sparse details of the 46th ASEAN Summit were included to provide additional context, but they do not significantly impact the overall article's focus on the ringgit's expected trajectory in the coming week.]
- The ringgit's trajectory is anticipated to continue its modestly upward trend during the 46th ASEAN Summit in Kuala Lumpur, influenced by broader US dollar weakness and renewed interest in emerging Asian foreign exchange.
- Tech and business enthusiasts might find the news from the ASEAN Summit intriguing, as announcements regarding cross-border digital payment infrastructure, logistics hubs, or energy transition financing could boost foreign direct investment sentiment and inject short-term bullishness into the ringgit.
- Despite the upcoming US Federal Reserve meeting minutes and the US personal consumption expenditures inflation report, the tech sector in Malaysia, specifically fintech, may strengthen further due to the expected ASEAN integration, de-dollarization, and alignment with US trade objectives discussed in the 46th ASEAN Summit.
