KUALA LUMPUR, Nov 19 — The ringgit is expected to strengthen further against the US dollar next week, depending on the 15th General Election (GE15) results which will be announced on Saturday.

The local note’s performance is also expected to improve following the recent statement by the United States Federal Reserve (Fed) that it would consider slowing the interest rate hike in the coming months, an analyst said.

SPI Asset Management managing director Stephen Innes said he expects forex exchange traders to shrug off the hawkish Fed tone, which should be favourable for Malaysia’s internal and external macro factors.

Nonetheless, he admitted that the GE15 election risk is a bit tougher to gauge.

"Still, whatever the GE15’s results may be, I suspect any unfavourable knee-jerk reaction in the ringgit will fade as the foreign exchange markets would quickly revisit the Fed’s pivot and China reopening, which are positive drivers of ringgit sentiment,” he told Bernama.

Innes noted that the market has moved very quickly in a positive direction, and with a few cracks forming in the Chinese yuan’s rally from the rise in Covid-19 cases, his call for next week has a bit more of a cautious tone to it.

"I expect the ringgit will trade between RM4.54 and RM4.57 as the momentum feels like it’s overstretching a bit, using the yuan as a signpost,” he said.

Meanwhile, Putra Business School associate professor Ahmed Razman Abdul Latiff said the Fed’s remarks will not further strengthen the US dollar against the world currencies.

"I expect that the local currency will be trading between RM4.50 to RM4.60 next week,” he said.

The market was closed on Friday as caretaker prime minister Datuk Seri Ismail Sabri Yaakob declared Nov 18 and 19 as public holidays to enable electors to exercise their right to vote in the 15th general election (GE15).

Meanwhile, on a Friday-Thursday basis, the ringgit increased against the US dollar to 4.5490/5565 on Thursday from 4.6200/6250 on Friday the previous week.

The local note was also traded higher against a basket of major currencies.

It appreciated against the Singapore dollar to 3.3091/3150 from 3.3527/3568 on Friday last week and rose vis-a-vis the Japanese yen to 3.2581/2637 from 3.3047/3088 previously.

The ringgit also improved against the British pound to 5.4069/4159 from 5.4322/4381 the previous week and strengthened against the euro to 4.7146/7224 from 4.7471/7522 previously. — Bernama