Ringgit likely to be in active trade and move between 4.24-4.26 against US dollar this week
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that apart from the United States (US) tariff, the next key question is whether the Federal Reserve (Fed) would cut the interest rates.
On that note, he said key data points would be the US Consumer Price Index (CPI) for June.
Thus far, the inflation rate has been quite manageable during the 90-day pause period.
"Obviously, the full implementation of reciprocal tariffs on August 1 would result in higher inflation, which could lead to the need to keep the Federal Fund Rate (FFR) steady as an ideal policy decision.
"The US dollar index (DXY) has been gradually climbing and therefore, emerging market currencies, including the ringgit, could stay on the low side,' Mohd Afzanizam said.
Meanwhile, SPI Asset Management managing partner Stephen Innes also said the ringgit is expected to trade within a narrow range ahead of the release of the US CPI next week, a key economic event likely to shape market direction and the Fed policy expectations.
The upcoming US inflation report, due Tuesday, would be closely watched by financial markets as it could offer clear signals on the path of interest rates, he said.
Innes said markets are particularly focused on the core CPI month-on-month figure, with 0.3 per cent seen as the critical threshold.
"A softer-than-expected reading could revive hopes for a September rate cut by the Fed, potentially leading to a pullback in the US dollar and offering the ringgit some relief,' Innes said.
However, he cautioned that a stronger print, particularly at 0.4 per cent or higher, would likely shift market expectations toward a more hawkish Fed, sparking renewed dollar strength.
"In that scenario, the US dollar-ringgit pair could climb toward 4.2700, although any initial spike may be short-lived if profit-taking emerges,' he noted.
He projected the ringgit to trade within a tactical range of 4.2400 to 4.2650, with market positioning expected to tighten further.
"For now, the ringgit remains a passenger in a vehicle driven by US macro outcomes -- not a driver in its own right,' Innes added.
On a Friday-to-Friday basis, the ringgit ended the week lower against the greenback, closing at 4.2475/2525 from 4.2180/2260 previously.
The local note traded mostly higher against a basket of major currencies.
The ringgit appreciated vis-a-vis the Japanese yen to 2.8893/8929 from 2.9225/9282, and increased against the British pound to 5.7524/7592 from 5.7601/7710 last Friday.
However, it marginally fell versus the euro to 4.9679/9737 from 4.9675/9770 at the end of last week.
Against Asean currencies, the ringgit was traded lower.
The local note was down against the Singapore dollar to 3.3186/3228 from 3.3114/3182, and narrowed versus the Indonesian rupiah to 261.8/262.3 from 260.6/261.2 previously.
It weakened versus the Thai baht to 13.0668/0886 from 13.0302/0609 and declined against the Philippine peso at 7.52/7.53 from 7.47/7.49 on last Friday. -- Bernama
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Barnama
2 hours ago
- Barnama
APEC Preparation Meeting Approves Seoul-Led Action Plan For Development
SEOUL, Aug 15 (Bernama-Yonhap) -- A Seoul-led action plan for the capacity building of developing economies of the Asia-Pacific Economic Cooperation (APEC) was approved at a meeting of senior APEC officials held to prepare the upcoming APEC summit in South Korea, the South Korean Foreign Ministry said on Friday. According to Yonhap News Agency, the five-step Capacity Building Need Initiative (CBNI) for developing APEC economies was endorsed at the APEC 2025 Korea Third Senior Officials' Meeting (SOM3), held in Incheon, about 40 kilometres west of Seoul. The two-day SOM3 brought together some 5,800 officials from 21 APEC member economies, delegations from observers and the secretariat to discuss a road map on strengthening the service competitiveness of the Asia-Pacific region and improving the environment for business and trade as well as devising a new financial action plan for APEC.
Barnama
2 hours ago
- Barnama
IMF Data: Kazakhstan Leads Post-Soviet States In GDP Per Capita
ASTANA, Aug 15 (Bernama-Kazinform) -- Kazakhstan's Gross Domestic Product (GDP) per capita in 2025 is expected to reach an impressive US$14,770, according to the latest International Monetary Fund (IMF) figures. Kazinform International News Agency reported that this figure is calculated at current prices, taking into account inflation and the present price level, making it a key indicator of economic well-being. By comparison, Russia, long considered the economic leader of the post-Soviet space, will stand at US$14,260, while energy-rich Turkmenistan will reach US$13,340. Notably, Kazakhstan has also surpassed China, where GDP per capita is projected at US$13,690. bootstrap slideshow The data highlights a substantial economic gap within the region. Kazakhstan is not only in the lead but is also showing consistent progress, overtaking countries with traditionally strong economies such as Russia and even large global players like China. Kazakhstan's achievement can be attributed to several key factors that have driven steady economic growth and strengthened its position in the region. The country holds some of the world's largest reserves of oil, gas, uranium, and other minerals. Exports of energy resources and raw materials remain a central driver of the economy. In recent years, Kazakhstan has worked to diversify its exports by developing processing industries and increasing the share of high value-added products. The government has pursued consistent reforms aimed at improving the business climate, attracting foreign investment, and developing infrastructure. State programmes have helped modernise the economy and boost competitiveness, while investments in sectors such as transport, logistics, and technology have played a significant role. Spending on education, healthcare, and social infrastructure has raised living standards, which in turn has supported productivity growth and expanded the domestic consumer market. Kazakhstan's strategic location in Central Asia makes it a vital link between Europe and Asia. Participation in initiatives like the Belt and Road, along with active cooperation with Russia, China, the European Union, and other partners, has expanded the country's economic opportunities.
Free Malaysia Today
3 hours ago
- Free Malaysia Today
Petronas Chemicals drops 11% after RM1bil loss in Q2
Petronas Chemicals suffered its largest quarterly loss since listing with a RM1.08 billion net loss in Q2 FY2025. (Bernama pic) PETALING JAYA : Petronas Chemicals Group Bhd's (PCG) shares tumbled 11% today after posting its largest quarterly loss since its listing in 2010, at RM1.08 billion for the second quarter ended June 30 (Q2 FY2025). The integrated chemicals producer, which posted a RM777 million net profit a year ago, saw its earnings affected by lower product margins, huge unrealised foreign exchange losses, and asset impairments. The stock fell as much as 44 sen or 11% to RM3.52 in the afternoon session, following the release of its Q2 financial results. It managed to pare its losses to close 36 sen or 9.1% lower at RM3.60, valuing the group at RM28.8 billion. It was the 11th most active stock on Bursa Malaysia with 26.4 million shares traded. Year to date, the stock has fallen nearly 26%. Revenue for Q2 fell 16% year-on-year to RM6.4 billion, impacted by lower sales volumes and product prices, reduced revenue from joint operations and the ringgit's appreciation against the US dollar. For the first six months of FY2025, the Petronas Group's chemical arm posted a cumulative net loss of RM1.1 billion from a net profit of RM1.45 billion in the same period last year. Revenue for the first half fell 7.4% to RM14.09 billion from RM15.23 billion last year. Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 56% to RM395 million, mainly due to weaker product spreads and reduced contribution from Pengerang Petrochemical Company Sdn Bhd (PPCSB). Forex losses widened to RM446 million from RM62 million a year earlier, largely due to the unrealised forex impact from the revaluation of shareholder loans to PPCSB. The group also recognised RM431 million in impairment losses on property, plant and equipment within its specialities segment, primarily at its Swedish unit Perstorp, which it acquired for RM7.31 billion in 2022. PCG's plant utilisation rate dropped to 77% from 94% in the previous quarter, as feedstock supply disruptions and repair and maintenance works impacted production. Among the affected facilities was PC Fertiliser Kedah, which faced feedstock shortages due to the gas pipeline incident at Putra Heights, which was fully resolved as of June 2025. Strategic portfolio review The disappointing results has prompted the group to intensify its business review, cut costs and resize its workforce. In a statement, the company also said it was reassessing investments in joint ventures and associates. Mazuin Ismail. Managing director and CEO Mazuin Ismail said in light of the increasingly dynamic market environment, PCG is undertaking a 'strategic portfolio review across our entire value chain'. 'Although we faced market and operational challenges during the quarter, our financial position remains robust. 'Furthermore, our value creation and cost optimisation initiatives have led to more than RM200 million in improvement in Ebitda on a year-to-date basis. This has enabled us to declare an interim dividend of RM240 million,' he said in a statement. The group declared a first interim dividend of three sen per share, down from 10 sen in the same quarter last year, payable in September.
