KUALA LUMPUR — The Malaysian ringgit is expected to trade cautiously against the US dollar in the coming week as investors closely monitor geopolitical developments in the Middle East and upcoming economic data from the United States.
According to economists, market sentiment remains highly sensitive to ongoing tensions in the Middle East, which could influence global oil prices and currency movements.
Chief economist at Bank Muamalat Malaysia Bhd, Mohd Afzanizam Abdul Rashid, said investors are currently hoping for signs of de-escalation in the regional conflict, although such developments remain uncertain.
Analysts say geopolitical tensions could overshadow key economic indicators expected to be released soon, including the US Consumer Price Index and personal consumption expenditure data for February.
Meanwhile, analysts at Kenanga Investment Bank Bhd noted that financial markets are also watching crude oil prices closely because they influence inflation expectations and potential policy decisions by the Federal Reserve.
Although Malaysia could benefit from higher oil prices due to its role as an energy exporter, analysts said the ringgit no longer moves strictly in line with oil prices. Instead, it behaves more like a high-beta emerging market currency that reacts strongly to global risk sentiment.
As uncertainty surrounding the Middle East conflict continues, analysts expect the US dollar to remain relatively strong, potentially keeping the ringgit under pressure in the near term.
During the latest trading week, the ringgit weakened against the US dollar, closing around 3.94 compared with about 3.89 in the previous week.
Financial markets are now waiting for clearer signals regarding geopolitical developments and global economic data, which could determine the direction of currency markets in the weeks ahead.
