Ringgit Trapped in Tight Range Ahead of Fed Rate Decision

Kuala Lumpur, Malaysia - The ringgit is expected to trade within a tight range against the US dollar next week, with investors remaining cautious ahead of key monetary policy decisions by the United States Federal Reserve (Fed) and the Bank of Japan (BOJ).

Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said the focus next week will be on the Federal Open Market Committee (FOMC) and BOJ monetary policy meetings, where both central banks are expected to raise their respective policy rates by 25 basis points.

The ringgit is likely to remain within a tight range of between RM4.06 and RM4.08 against the US dollar next week, according to Dr. Mohd Afzanizam. This is due to expectations of a rate hike by the US Fed, which have shaped sentiment in the foreign exchange market and lent support to the US dollar.

External developments, particularly the sharp rise in crude oil prices amid the intensifying US-Israel-Iran conflict, are also expected to influence market sentiment. Brent crude oil prices have pushed higher to around US$104.64 (RM425.91) per barrel.