Ringgit opens stronger


KUALA LUMPUR (Oct 11): Ringgit rises to two-week high after the dollar slumped and energy prices rallied overnight.

* USD/MYR falls 0.1% to 4.2135; reached 4.2095, lowest since Sept. 26

** Support 4.2090, 4.1825, 4.1733; resistance 4.2440, 4.2491, 4.2686

** Bloomberg Dollar Spot Index drops 0.1%; Brent crude steady after rising 1.5% Tuesday

* Ringgit remains Oanda Corp’s “go-to trade” in the region due to Malaysia’s relatively high yield and undervalued equity market, says Stephen Innes, Singapore-based head of trading for Asia- Pacific

** Ringgit also helped by positive macro outlook and foreigners’ light positioning even as BNM’s “rigid” FX policy hurts sentiment

** EM Asian FX likely to trade on a stronger note on Wednesday due to weaker USD, minimal fallout from the Turkish tumult and as concerns over Spain abate for now

* United Overseas Bank sees USD/MYR reaching 4.20 by year-end amid a positive outlook for crude prices and expectations for the government to unveil a pro-growth national budget this month while sticking to its fiscal-deficit reduction plans, economist Julia Goh wrote in note Tuesday

** Key risks to watch include a rise in U.S. inflation and bond yields, slower bond inflows into the region as the Fed unwinds its balance sheet and geopolitical risks

* 10-year govt bond yield fell 2bps Tuesday to 3.91%

* Govt to auction RM1.5b of 2037 Islamic bonds on Thursday

* Industrial production +5.8% in Aug. y/y vs 6.1% July: Bloomberg survey before data due Thursday

The Edge Markets via Bloomberg

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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