Ringgit expected to trade in narrow range vs greenback ahead of BNM's OPR decision

KUALA LUMPUR: The ringgit is expected to trade within a narrow range against the US dollar next week as investors turn their attention to Bank Negara Malaysia's overnight policy rate (OPR) decision on Nov 5.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said a potential OPR hike next week could provide support for the ringgit, as the central bank may consider normalising the policy rate in view of the country's stronger-than-expected economic growth trajectory.

"Perhaps, the dollar-ringgit would range between RM4.05 to RM4.07 next week," it said.

Meanwhile, Kenanga Investment Bank Bhd said any escalation in the Middle East crisis could push oil prices and the US Treasury (UST) term premium higher, reversing the 10-year yield's decline below 5.00 per cent and reviving demand for the US dollar.

"Expect investors to stay defensive through the vote, leaving ringgit's gains exposed.

"We see ringgit volatile within the RM4.04-RM4.08 range next week, with our RM4.00 year-end target still within reach," it said in a research note.

Meanwhile, on a Friday-to-Friday basis, the ringgit surged against the greenback to 4.0555/0600 from 4.0835/0875 a week earlier.

The local currency traded higher against a basket of other major currencies during the week.

It rose vis-a-vis the Japanese yen to 2.5782/5812 from 2.6076/6103 on the previous Friday and appreciated against the British pound to 5.4461/4522 from 5.4633/4687, and gained versus the euro to 4.5413/5464 from 4.5735/5780 a week earlier.

The ringgit traded mostly higher against Asean currencies.

It advanced versus the Singapore dollar to 3.1753/1791 from 3.1952/1986 a week earlier, and inched up against the Indonesian rupiah to 223.4/223.8 from 225.8/226.1.

The local note also climbed vis-a-vis the Thai baht to 12.0373/0561 from 12.0985/1154 at the end of last week, and it went up against the Philippine peso to 6.36/6.37 from 6.42/6.43 previously.