The ringgit is expected to weaken against the US dollar next week after the US Federal Reserve (Fed) struck a more hawkish tone on interest rates at its monetary policy meeting on Wednesday.

MIDF Amanah Investment Bank Bhd Chief Economist Kamarudin Mohd Nor said the ringgit like other emerging economies currencies is expected to remain under pressure in the upcoming week due to various developments in the past few weeks.

"Broad based strengthening of US dollar amid solid economic data as well as hawkish Fed statements helped lift the greenback. Trade spats between US and its trading partners have also affected the risk sentiment," he told Bernama.

However, the announcement of Nor Shamsiah Mohd Yunus's appointment as the new Governor of Bank Negara Malaysia (BNM) on Friday, for a term of five years effective from July 1, 2018, was seen as a positive news as she is very capable with in-depth knowledge and experience in BNM.

The announcement together with Prime Minister Dr Mahathir Mohamad’s comment that he sees the fair value of the ringgit at 3.80 against the US dollar would lend support to the local currency, he added.

FXTM Global Head of Currency Strategy and Market Research Jameel Ahmad said the relentless buying momentum for the US dollar has been the catalyst behind the fall of the ringgit over the past couple of weeks.

"However, it is possible for the ringgit to fall back below 4.00 against the US dollar, but it would be dependent on investors taking profit on the greenback," he added.

Meanwhile, Hong Leong Research said the ringgit closed about 0.78 percent weaker week-on-week to 4.0157 against a stronger US dollar and underperformed against seven of the group of 10 currencies as escalation in trade tensions continued to unnerve markets and suppressed demand for emerging market currencies.

"We are bearish on ringgit against US dollar next week, as widening yield differential between the US and other majors, as well as, ongoing concerns over an imminent trade war will continue to keep the greenback bullish.

"Technically, upside momentum in US dollar against the ringgit is gaining traction and consecutive closes above the psychological 4.00 level are expected to lead the pair higher to 4.0213, followed by 4.0349 next," it added.

The market was closed last Friday for Hari Raya.

On a Friday-to-Thursday basis, the local note finished lower against the greenback at 4.0010/0040 from 3.9835/9875.

The ringgit was traded mostly higher against a basket of major currencies, except the Japanese yen.

It rose against the Singapore dollar to 2.9484/9511 from 2.9861/9896 last Thursday and appreciated against the euro to 4.6644/6683 from 4.7097/7160 .

The ringgit improved vis-a-vis the British pound to 5.3189/3245 from 5.3506/3576, but declined against the yen to 3.6323/6360 from 3.6230/6270

- Bernama