Ringgit Expected to Trade Around RM4.78 Per US Dollar Amid West Asia Tensions

The Malaysian ringgit is expected to trade around RM4.78 per US dollar next week as tensions in West Asia escalate, potentially impacting the currency's performance. Authorities are monitoring the situation to ensure market stability.

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Ringgit Expected to Trade Around RM4.78 Per US Dollar Amid West Asia Tensions

Ringgit Expected to Trade Around RM4.78 Per US Dollar Amid West Asia Tensions

The Malaysian ringgit is anticipated to trade around RM4.78 per US dollar next week as investors closely monitor escalating tensions in West Asia, according to analysts. Any further escalation in the region is likely to increase demand for the US currency, potentially impacting the ringgit's performance.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said, "The ringgit should stay within the prevailing level next week, as any form of escalation in tension would result in a higher demand for the US dollar." Markets will also be watching for the Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index.

Kenanga Research noted that stable growth prospects and continued support from authorities might help keep the ringgit stable, with the USD/MYR expected to trade near its five-day exponential moving average of 4.78. The local note could strengthen against the US dollar if risk sentiment improves, with immediate support at 4.781.

Why this matters: The stability of the Malaysian ringgit is critical for the country's economy and international trade. Escalating tensions in West Asia have the potential to disrupt global financial markets and impact currency values, making it important for investors and policymakers to closely monitor the situation.

On a Friday-to-Friday basis, the ringgit depreciated to 4.7810/7855 versus the greenback but traded mostly higher against most other major currencies, underpinned by a technical rebound and positive sentiment due to advance estimates for Malaysia's GDP growth. Bank Negara Malaysia (BNM) said the central bank stood ready to deploy tools to ensure the Malaysian financial markets remain orderly and efficient in light of the current geopolitical situation.

Oil prices rallied and equities fell on Friday as reports of explosions in Iran and Syria fueled fears of an escalation in the Middle East crisis after last weekend's missile attack on Israel by Iran. Analysts warn that the escalating shadow warfare between Israel and Iran has ignited the powder keg in the Middle East, and this new phase of the conflict is expected to have significant and far-reaching consequences for Middle East peace and risk markets.

Key Takeaways

  • Ringgit expected to trade around RM4.78 per USD next week due to West Asia tensions
  • Escalating tensions in West Asia likely to increase demand for USD, impacting ringgit
  • Stable growth and support from authorities may help keep ringgit stable near 4.78
  • Oil prices rally, equities fall as reports of explosions in Iran and Syria fuel fears
  • Escalating conflict between Israel and Iran expected to have significant consequences