Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid expects the local currency to move within a tight range of around RM4.40 to the dollar.

He said the key data points from the US would be the core personal consumption expenditure inflation for May as well as the house price index which is likely to stay elevated.

“This will continue to revolve around rising inflationary pressures, making it necessary for the US Federal Reserve to remain hawkish in its monetary stance,” he told Bernama.

Afzanizam said a possible rise in the overnight policy rate (OPR) would also provide some support for the ringgit even if fears of a US recession continue to rise.

“The latest consumer price index for Malaysia, which rose to 2.8% in May 2022 from 2.3% in the same month last year suggests that Bank Negara Malaysia may be inclined to raise the OPR to close the gap with the inflation rate,” he said.

“Therefore, market sentiments will remain guarded, leading to a tight range in the ringgit versus US dollar,” he added.

For the week just ended, the ringgit was traded mostly higher against the greenback as the bearish outlook on the global economy prompted more investors to shift to emerging currencies.

On a weekly basis the ringgit fell against the greenback, closing at 4.4010/4.4045 on Friday compared with 4.4000/4.4040 a week earlier.

However, the local note traded mostly higher against a basket of major currencies on a Friday-to-Friday basis.

The ringgit appreciated against the Singapore dollar to 3.1710/3.1740 from 3.1753/3.1786 a week earlier, rose vis-a-vis the Japanese yen to 3.2590/3.2621 from 3.2655/3.2688 and gained against the British pound to 5.4128/5.4171 from 5.4208/5.4257 previously.

However, it depreciated versus the euro to 4.6444/4.6481 from 4.6314/4.6357 last week.