Ringgit slides to start the week

KUALA LUMPUR, Oct 23 — The ringgit ended lower against the US dollar today due to a minor sell-off in the Malaysian bond market.

At 6pm, the local unit was traded at 4.2360/2390 versus the US dollar from 4.2240/2260 on Friday.

OANDA Head of Trading Asia-Pacific, Stephen Innes, said the local bond market opened on a sour note climbing around three to four basis points following the expected rise in the US interest rates.

He said the minor sell-off was somewhat expected as traders were cautious ahead of the 2018 Budget speech on Friday.

“It is a big week for the ringgit but with the 2018 Budget likely to target lower income groups, the net effect should be stimulatory for the economy and support the local unit to a degree,” Innes told Bernama.

On the external front, he said, the market focus remained on who would be the next US Federal Reserve (Fed) Chair and on the US tax reform.

“The Asian foreign exchange market is showing a robust correlation to the US dollar trend. We could be on the verge of a near-term crossroads that could see the greenback being pushed higher in the short-term and weakens the ringgit towards 4.25 support levels, more so on a contentious Fed chair surprise.

“I expect traders will tread lightly this week given the level of market uncertainty,” said Innes.

The ringgit, however, ended mixed against other major currencies.

The local note strengthened against the yen to 3.7174/7204 from 3.7252/7279 on Friday and improved against the euro to 4.9709/9749 from 4.9885/9922 last week.

It, however, fell against the Singapore dollar to 3.1069/1103 from 3.1057/1085 on Friday and depreciated against the British pound to 5.5771/5828 from 5.5512/5555 last week. — Bernama

Malaysia Mail via Bernama

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