Based on current market movements, the Malaysian Ringgit (RM) currency is predicted to trade high this week following the positive impact from China's latest domestic stimulus package and the Federal Reserve's (Fed) policy stance regarding its recent interest rates.
China's move is in line with its commitment to support the real estate sector by providing stronger incentives to investors.
According to the managing partner of SPI Asset Management, Stephen Innes said because China is Malaysia's largest export destination, any stimulus to its domestic economy will also have an impact on Malaysia's export activities.
Innes said regional investors' acceptance of China's stimulus package will help the ringgit's performance this week.
Meanwhile, the market is still digesting the situation of the US Open Market Committee (FOMC) which chose to maintain its interest rate at 5.25% to 5.50% during its 'dovish' meeting last week.
Bank Muamalat Malaysia Chief Economist Mohd Afzanizam Abdul Rashid believes the ringgit may try to break through the immediate support level at RM4.6611 this week when the Fed is expected to cut interest rates next year.
He said the main focus now is on the Japanese yen as a Reuters poll of the Bank of Japan (BOJ) is expected not to continue its loose monetary policy in January next year.
The BOJ's monetary policy meeting tomorrow (December 19, 2023) will be closely watched as markets are looking for clues on whether the country will begin to exit the loose policy it has maintained for so long.
