Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 13): The ringgit rebounded 0.22% to open at 4.0472 this morning versus the US dollar (USD), following better clarity of the state of emergency, amid the reimplementation of the movement control order (MCO).

At the time of writing, the ringgit had risen 0.27% to 4.0455 against the USD.

FXTM market analyst Han Tan told theedgemarkets.com Malaysia’s health and economic responses would be central themes in ascertaining the ringgit’s near-term performance.

“Once the immediate reaction fades and there’s more clarity of the domestic economic and political outlook, the ringgit is expected to resume its gains against the USD,” he said.

Axi chief global market strategist Stephen Innes also said in a note today that after initially buckling at the knees over the declared state of emergency in Malaysia, the ringgit took a decidedly positive turn on both the recent Federal Open Market Committee’s (FOMC) taper pushback and gains in commodity prices, most notably higher oil prices.

“The general fade play here is that lockdowns are being viewed as a speed bump. Provided vaccine efficacy remains high during the worldwide roll-out; forex (foreign exchange) traders will still buy into currency weakness in Asia.

“There is no convincing reason to turn full throttle bearish on the ringgit (or Asean currencies) other than the lockdown while the global reflation trade still fires,” he said, adding that his year-end view for the ringgit is 4.00 against the USD.

Meanwhile, Kenanga Research said in a note today that in the immediate term, the local note is expected to linger around the 4.05 to 4.10 range as the declaration of the state of emergency and reimplementation of the MCO had dented investors’ confidence in Malaysia.

“Nevertheless, we still maintain our USD-MYR (ringgit) year-end forecast of 3.95 on the back of effective vaccine roll-outs, higher Brent crude oil prices and broad USD weakness,” it said.

Edited BySurin Murugiah
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