Ringgit Seen Soft vs US Dollar as Fed Hike Bets Build

Quick Answer: The ringgit is expected to stay soft against the US dollar next week, with Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid forecasting a range of RM4.07 to RM4.10. The greenback remains supported by expectations of further interest rate hikes by the US Federal Reserve. For Bursa Malaysia shareholders, a weaker ringgit changes the ringgit value of any dollar-denominated earnings and holdings, so the currency is worth monitoring.

Why Is the Ringgit Expected to Stay Soft Against the US Dollar?

Finance chart tracking ringgit movements against the US dollar — Currency charts track the ringgit against the greenback

On a Friday-to-Friday basis, the ringgit weakened to 4.0845/0890 against the greenback from 4.0565/0610 a week earlier. That is a depreciation of roughly 0.7%, based on the mid-rates.

Dr Mohd Afzanizam said investor sentiment continues to favour the greenback. He told Bernama that markets are pricing in a sizeable Fed rate hike in December.

What Is the Ringgit Forecast Range for Next Week?

Forecast range: RM4.07 to RM4.10 against the US dollar
Friday close: 4.0845/0890
Key data: US retail sales for October, due Nov 17
Consensus: a 0.2% month-on-month increase, versus 0.8% in September

The forecast band brackets Friday’s close, so the ringgit is not expected to break far from current levels. The US retail sales print on Nov 17 is the main data point market participants will watch.

How Did the Ringgit Perform Against Other Major Currencies?

The ringgit traded higher against a basket of major currencies during the week. The gains were broad, but the weakness was concentrated in two currencies.

Japanese yen: 2.5549/5579, from 2.5616/5646 the previous Friday
British pound: 5.4046/4106, from 5.4304/4365
Euro: 4.5166/5216, from 4.5315/5365
Thai baht: 12.0611/0833, from 12.0898/1105
Philippine peso: 6.41/6.42, from 6.43/6.44
Indonesian rupiah: 224.3/224.6, from 224.2/224.6
Singapore dollar: 3.1729/1769, from 3.1657/1694, a weaker ringgit

What Does a Softer Ringgit Mean for Bursa Malaysia Investors?

The source article names no Bursa-listed company, so no stock code or earnings figure applies here. The ringgit’s weakness is specific to the greenback and the Singapore dollar. Against the yen, pound, euro, baht and peso, it firmed.

Three points are worth monitoring for shareholders with dollar exposure:

The RM4.07 to RM4.10 forecast band against the US dollar
The October US retail sales release on Nov 17
The size of the Fed rate hike expected in December

Key Takeaways

The ringgit closed at 4.0845/0890 against the US dollar, weaker than 4.0565/0610 a week earlier.
Bank Muamalat’s Dr Mohd Afzanizam expects RM4.07 to RM4.10 next week.
Expectations of a sizeable Fed rate hike in December underpin the greenback.
US retail sales for October on Nov 17 is the key data point, with consensus at 0.2% month-on-month.
The ringgit firmed against the yen, pound, euro, baht and peso, but eased against the Singapore dollar.

Frequently Asked Questions

What is the ringgit forecast against the US dollar next week?

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects the ringgit to trade between RM4.07 and RM4.10 against the US dollar next week. The ringgit closed Friday at 4.0845/0890.

Why is the ringgit weak against the US dollar?

Investor sentiment favours the greenback because of expectations of further interest rate hikes by the US Federal Reserve. Dr Mohd Afzanizam cites a sizeable Fed rate hike expected in December.

When is the US retail sales data for October released?

The October US retail sales data is due on Nov 17. Consensus estimates point to a 0.2% month-on-month increase, compared with 0.8% in September.

Did the ringgit strengthen against the Japanese yen this week?

Yes. The ringgit rose against the yen to 2.5549/5579 from 2.5616/5646 the previous Friday, according to Bernama’s weekly currency report.

This article is for information only and is not investment advice. Do your own research before making any investment decision.

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