THE outlook for ringgit next week is expected to be neutral to bullish on improving sentiment anticipation following major central banks’ decisions.

Kenanga Research said a potential policy tweak by the Bank of Japan (BOJ) and the market’s anticipation of a continued pause by the US Federal Reserve (Fed) and a relatively weak US jobs report might temper the greenback’s ascent next week.

It said the Federal Open Market Committee (FOMC), BOJ and Bank Negara Malaysia (BNM) Monetary Policy Committee meetings were scheduled for next week.

“The ringgit may reverse its weakness against the US dollar should risk sentiment improve with the pair’s immediate support awaiting at 4.773,” it said in a research note.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said he expected BNM to retain the overnight policy rate at 3%.

“The focus for next week will be on the FOMC and BNM meetings,” he said.

He said the markets would be observing the latest assessment by the Fed on the outlook for the economy.

“Thus far, the third-quarter data showed the US economy has been quite resilient with growth recorded at 4.9%,” he said.

Afzanizam said looking at the US economic print, 25 basis points hikes are almost a given next week.

He said on top of that, the market will also continue to remain cautious in light of the ongoing Israel-Hamas conflict.

He said the ringgit might remain range-bound between 4.77 and 4.78 level.

On a Friday-to-Friday basis, the ringgit weakened against the US dollar to 4.7750/7800 from 4.7655/7700 a week earlier amid the conflict in the Middle East and cautious sentiment ahead of US economic data released.

The local unit is also weaker against most major currencies, except against the euro, where it improved to 5.0438/0491 from 5.0462/0510 a week ago.

It slipped versus the Japanese yen to 3.1827/1862 from 3.1781/1813 and depreciated vis-a-vis the British pound to 5.7945/8005 from 5.7777/7831 a week earlier.

The ringgit was traded mixed against its Asean peers.

It appreciated against the Indonesian rupiah to 299.5/300.0 from 300.1/300.7 last week and was flat against the Philippine peso at 8.38/8.39, compared to 8.38/8.40.

The local currency declined versus the Singapore dollar to 3.4867/4906 from 3.4731/4767 at the previous Friday’s close and went down against the Thai baht to 13.1808/2008 from 13.0504/0681. – Bernama, October 28, 2023.