Kenanga Research says that the ringgit may continue last Friday’s uptrend and trade around the 4.18 level against the USD as the 10-year UST yield fell below the 1.8% threshold on Jan 21 amid risk aversion in US equity markets.
However, if there are any clues that the Fed may shorten its tightening timeline during the January FOMC meeting, the USD may regain its strength. Additionally, the direction of the greenback will also be influenced by the US 4Q21 GDP reading.
Reviewing the ringgit’s performance, the research house said that the depreciated slightly against the USD last week, despite a 2.1% rise in Brent crude oil price, It said that BNM’s positive outlook on the domestic economy and Malaysia’s stable inflation reading. To note, the USDMYR pair rose to as high as 4.194 on Jan 19 due to a sharp rise in the 10-year US Treasury (UST) yield amid mounting anticipation of a potential Fed rate Hike
