The Malaysian currency led weekly losses in emerging Asia
with a 2.9 percent slump against the greenback so far this week.
That would be the largest weekly depreciation since late
September last year.
“A dangerous combination of extremes is likely amplifying
movements, as volatility expectations remain elevated, yet
liquidity is extremely weak,” said Stephen Innes, senior FX
trader for FX broker OANDA in Singapore.
“The fire alarm is sounding and I expect a mad dash for the
exits if we break the critical support 4.40-42 levels.”
Malaysia’s central bank demanded foreign banks sign
commitments to stop trading the currency in offshore markets,
Reuters reported on Wednesday, a move the broader market views
as a form of capital controls.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.