Ringgit Retreats

by ALIFAH ZAINUDDIN/ FILE PIX

THE rally in the ringgit suffered a minor setback yesterday as uncertainties around a tax shake-up in the US saw investors adopting a “wait-and- see” mode.

The local unit slumped to RM4.075 against the dollar yesterday, a 0.22% drop, after opening at RM4.0645 as the dollar firmed on optimism surrounding the tax legislation.

Australia and New Zealand Banking Group Ltd head of research Khoon Goh believe the momentum could well extend in the near term to push the local unit towards the RM4 mark against the US dollar.

He said the ringgit’s gains appear to be “overextended” and a retracement could occur against the greenback, but a stronger global growth outlook and higher oil price will provide an offset for a firmer ringgit.

Oanda Corp head of trading for Asia Pacific Stephen Innes added that the ringgit rally could run deeper if the economic and monetary policy stars align.

“While upcoming elections could cause a hiccup, a stronger currency would be a definite signpost that the economy is doing exceptionally well, so we
could see the government lending support to the stronger ringgit narrative for an election campaign bounce,” Innes said.

The greenback’s gains could be short-lived amid growing concerns of a possible US government shutdown with its federal budget deadline looming.

The Malaysian Reserve

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.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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