BERNAMA – The ringgit is expected to trade between 4.69 and 4.70 this week as markets focus on the United States (US) Federal Open Market Committee (FOMC) meeting on March 19-20.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that prior to that, the Bank of Japan (BoJ) would also convene its monetary policy meeting today and tomorrow.
He said markets would be closely monitoring the Japanese central bank’s decision whether it would end its negative interest rate policy (NIRP) and the yield curve control (YCC) as Japan’s biggest companies have agreed to raise wages by 5.28 per cent for 2024, which would exacerbate the inflation rate.
As for the US Federal Reserve (Fed), Mohd Afzanizam said the critical area to look at is the Fed Dot Plot, which is the survey among Fed members on the Fed Fund Rate.
Last December, the Fed staff has projected three rate cuts in 2024.
“A pushback in the degree of policy accommodation would bolster the value of US dollar.
“On that note, expect ringgit to trade around MYR4.69 to MYR4.70 next week,” he told Bernama.
Meanwhile, Kenanga Research said as the market braces for the upcoming FOMC meeting, the allure of the safe-haven US dollar may persist, particularly in light of the US economy’s persistent resilience.
Unless clear indicators of an imminent downturn emerge, US dollar bears may remain in hibernation, particularly with expectations that the BoJ may defer any significant moves until April, rather than acting next week.
