Ringgit Trades Below the key 4.0 vs USD

SINGAPORE (Jan 8): Ringgit strengthens to fresh 16-month highs as oil prices and Asian stocks continue to advance.

* Combination of USD weakness and firming oil prices appears to have been enough to break psychological support in USD/MYR, Stephen Innes, head of trading for Asia Pacific at Oanda, writes in note

** While MYR should continue to strengthen on a “benevolent” Fed outlook and rallying energy prices, market has most likely sufficiently priced in a BNM January rate hike, so pace of appreciation may slow

** Profit taking expected to set in ahead of this month’s rate decision

* NOTE: Bank Negara Malaysia due to decide on policy rate on Jan. 25

* USD/MYR declines as much as 0.3% to 3.9873, lowest since August 2016

** The pair slid 1.2% last week, the most since the period ended Sept. 8

** 14-day RSI drops to 15, deep in over-extended territory

** MSCI Asia Pacific excluding Japan Index gains 0.2% following a 3.1% weekly jump

** WTI crude futures up 0.3%

* Malaysia will suspend export duties on crude palm oil for three months to combat price drop, according to Plantation Industries and Commodities Minister Mah Siew Keong * Opposition Pakatan Harapan names Mahathir as candidate for prime minister

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