Ringgit Through the Ringer

Emerging Asian currencies and bonds have been under pressure from the greenback’s strength amid expectations that U.S. President-elect Donald Trump’s policies to boost fiscal spending will lift inflation and interest rates. U.S. Treasury yields were already rising despite the recent pullback.

His protectionist stance on trade has also been hurting the currencies of Asia’s export-reliant economies.

“Regional outflows should persist given the uncertainties around U.S. interest rate trajectory and President-elect Trump’s trade policies,” said Stephen Innes, senior FX trader for FX broker OANDA in Singapore.

“The fear of massive redemptions may accelerate the feedback loop if local EM conditions continue to deteriorate, which will put additional pressure on regional bond and equity markets.”


The ringgit lost 0.6 percent to 4.4430 per dollar, its weakest since Oct. 2, 2015.

The Malaysian currency came under further pressure from dollar demand from importers for payments.

Currency traders were little fazed by data on Tuesday showing the country’s international reserves rose in the first two weeks of November, even though reserves are expected to fall on surging capital outflows.


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