RINGGIT TO TRADE IN NARROW RANGE AGAINST US DOLLAR IN HOLIDAY-SHORTENED WEEK AHEAD

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, Dec 27 (Bernama) -- The ringgit is expected to trade in a narrow range next week, hovering between 4.03 and 4.05 against the US dollar amid a holiday-shortened week.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this is mainly due to the New Year celebrations and a lack of market catalysts.

“It is likely that the USDMYR will continue to hover within a narrow range next week, possibly around 4.03 to 4.05, owing to a lack of fresh leads, especially on the data front,” he told Bernama.

Kenanga Investment Bank Bhd said that after breaking above 4.00 versus the US dollar for the second time since June 2018, the ringgit has struggled to sustain a move below that level for nearly seven years.

“We have maintained our end-2025 forecast of 4.08 against the US dollar since May, but see scope for the ringgit to end the year closer to 4.00 against the US dollar. That level is likely to present strong resistance,” it said in a research note.

In addition, it said seasonal US dollar strength in the first quarter of 2026, combined with a still-resilient US growth narrative, could push the pair back towards 4.05-4.10 against the US dollar early in the year.

“Beyond that, the ringgit should gradually strengthen towards its long-term fair value as structural support for the US dollar continues to erode,” it said. 

The local currency traded mixed this week, opening at 4.07 before strengthening to as high as 4.0410 on Friday morning, then easing to close the week at 4.0470.

At 8 am yesterday, the ringgit surged to 4.0410/0495 against the greenback from 4.0425/0515 at Wednesday’s close, its highest level in nearly five years. The ringgit hit 4.0450/0443 on Feb 26, 2021.

The market was closed on Thursday in observance of Christmas Day.

Earlier this week, the local currency was mainly influenced by expectations of a US interest rate cut and by weaker US consumer confidence.

On a weekly basis, the ringgit strengthened against the greenback, closing higher at 4.0470/0535 compared with 4.0740/0785 at the end of last week.

The local note traded mostly higher against a basket of major currencies.

It strengthened against the Japanese yen to 2.5866/5909 from 2.5909/5940 a week earlier, appreciated versus the euro to 4.7629/7706 from 4.7715/7767, but fell vis-a-vis the British pound to 5.4570/4657 from 5.4514/4574 previously.

The ringgit also traded mostly higher against its ASEAN peers.

It gained versus the Indonesian rupiah to 241.6/242.2 from 243.2/243.6 at the previous Friday’s close, increased against the Singapore dollar to 3.1497/1550 from 3.1515/1553 a week earlier, and advanced against the Philippine peso to 6.89/6.90 from 6.94/6.95.

However, the local currency depreciated vis-a-vis the Thai baht to 13.0212/0484 from 12.9428/9620 previously.

-- BERNAMA