By Rosemarie Khoo

KUALA LUMPUR, April 1 (Bernama) -- The ringgit is likely to trade on a bullish bias next week, below the RM4.40 level within the 4.3925-4.4175 range against the US dollar, said an analyst.

SPI Asset Management managing partner Stephen Innes said while markets shift through the wreckage of the United States (US) banking stresses, Asian currencies should continue to perform well, especially with US rate markets signalling a US Federal Reserve (Fed) interest rates cut later this year.

"Asian foreign exchange (FX) remains anchored by Chinese growth and has provided an oasis during all the recent western bank turmoil. Solid growth in China should continue to provide a fillip to Malaysia's export-oriented economy. 

“However, the lower yield levels relative to other emerging market (EM) currencies makes it slightly less attractive than other higher risks unless China's growth starts to pick up in earnest,” Innes told Bernama. 

Meanwhile,  Bank Muamalat  Malaysia Bhd chief economist and social finance Dr Mohd Afzanizam Abdul Rashid said the ringgit had been appreciating quite steeply against the greenback as hints of a more dovish Fed had led to a weaker dollar. 

In the second quarter (2Q) 2023, he expected it to be still bumpy for FX as all eyes will be on the Federal Open Market Committee (FOMC) meeting in May and June, on whether the Fed would actually pause the interest rate hike. 

"Apart from that, the markets would also want to see whether the banking crisis is really over. It’s going to be choppy trade in the 2Q 2023 the way we see it," said Afzanizam. 

Meanwhile, MIDF Research in a note on Friday said the appreciating ringgit trend is expected to continue and average stronger at RM4.20 and by year-end at around RM4.00 against the US dollar, supported by the upbeat domestic economy.

It said the local note is in a good position to strengthen as the domestic economy momentum stays upbeat and as Malaysia is a net commodity exporter of crude petroleum, liquefied natural gas and palm oil, it stands to gain from the elevated global commodity prices and sustained trade surplus.

On a week-on-week basis, the ringgit was traded higher against the US dollar at 4.4130/4175 against Friday’s close of 4.4250/4305 a week earlier.

Meanwhile, the local note traded mostly lower against a basket of major currencies compared to a week earlier.

It weakened against the British pound at 5.4580/4636 from 5.4034/4101 a week earlier and dropped vis-a-vis the euro to 4.8036/8084 from 4.7476/7535, but rose against the Japanese yen to 3.3083/3122 from 3.4099/4144 previously.

Meanwhile, the ringgit traded mixed against its Asean counterparts.

The local note was marginally weaker versus the Singapore dollar at 3.3185/3224 from 3.3178/3225 in the previous week and decreased vis-a-vis the Indonesian rupiah to 294.20/294.70 from 291.90/292.50 previously.

It appreciated against the Thai baht to 12.9031/9220 from 12.9610/9835 and increased against the Philippine peso to 8.12/8.13 from 8.15/8.16 previously. 

-- BERNAMA