Kuala Lumpur: The ringgit is set to exhibit softness next week during the last period of trading in 2024 and the start of 2025, with movements likely ranging between 4.47 and 4.50.
SPI Asset Management managing partner Stephen Innes expects Asian currencies, including the ringgit, to face a cautious period as market participants navigate mixed signals and geopolitical concerns during the thin trading week.
He said the US dollar tends to weaken seasonally at this time, but with President-elect Donald Trump’s tariffs on the horizon, there’s an added layer of uncertainty.
“Locally, investors are also maintaining a cautious stance due to concerns over China’s economic issues, particularly the record US$411 billion special bond issuance slated for next year and its potential impact on consumer demand.
“This uncertainty has cast a shadow over the ringgit,” he told Bernama.
Similarly, UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan anticipated a lower ringgit movement next week following a cautious approach expected from the Federal Reserve.
He said that market expectations of only two US rate cuts in 2025 will support the greenback.
“Entering 2025, Asian currencies are expected to weaken against the US dollar in the first six months, driven by market reactions to Trump’s re-election and anticipated trade tariffs.
“Since Trump’s victory in early November, the US Dollar Index has rallied about 4.0 per cent to 107.6, the highest level in two years, reflecting expectations of potential tariffs on US trade partners,” he noted.
Throughout the week, the ringgit remained in positive territory, buoyed by higher oil prices, before closing little changed on Friday.
On a Friday-to-Friday basis, the ringgit appreciated against the US dollar to 4.4680/4750 from 4.5055/5100 a week ago.
For the week, the local note traded higher against other major currencies.
It gained versus the British pound to 5.5904/5991 versus 5.6328/6384 previously.
It rose versus the euro to 4.6543/6616 from 4.6776/6823 and increased vis-a-vis the Japanese yen to 2.8300/8346 from 2.8747/8779 at last week’s close.
The ringgit traded mixed against Asean currencies, strengthening against the Singapore dollar to 3.2846/2900 from 3.3146/3181 and versus the Indonesian rupiah at 275.4/276.1 from 277.7/278.1 previously.
It eased against the Thai baht to 13.1023/1289 from 13.0670/0861 and fell vis-a-vis the Philippine peso to 7.72/7.74 from 7.66/7.67 last week.
