BERNAMA – The ringgit is likely to trade from neutral to positive mode between 4.70 and 4.71 against the US dollar next week as the Federal Reserve (Fed) chairman Jerome Powell’s testimony to the United States (US) Congress will be closely followed by the market participants.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said this was in order to gauge the latest Fed assessment on inflation risk.
“Also, Bank Negara Malaysia’s (BNM) Monetary Policy Committee members will deliberate their overnight policy rate decision on July 11, with most economists expecting the benchmark interest rate to stay unchanged at three per cent,” he told Bernama.
To some degree, he said this might give some advantage, and should the Fed really start cutting their rates and the BNM remain status quo, it would lead to narrow interest rate differentials between the two countries.
Meanwhile, Kenanga Investment Bank Bhd has maintained a positive outlook for the ringgit in the coming week, though some investors may still favour the US dollar as long as Trump leads in the polls.
“Domestically, the ringgit could remain supported by BNM’s policy status quo and a favourable macroeconomic outlook, provided retail sales and Industrial Production Index readings remain strong,” it said.
