Friday 29 Mar 2024
By
main news image

SINGAPORE (Sept 14): USD/MYR is ready to start a fresh downtrend as its divergence from a flattening forward FX curve comes to an end. The ringgit will also benefit from the positive sentiment shift seen this week toward the EM currency complex.

A strong dollar and concerns over Malaysian government revenue have been part of the reason for spot USD/MYR to break its traditional link with forwards in recent weeks. Both are now fading as factors against the ringgit. USD is losing ground across EM FX pairs and PM Mahathir's government is getting into its stride.

Although the central bank sounded a bit dovish when it held policy unchanged Sept. 5, it doesn't have any room to lower rates as a new sales tax is due to be implemented soon.

The period of ringgit underperformance that MLIV saw coming in July is now set to conclude.

      Print
      Text Size
      Share