Ringgit Could Hit All Time Low Of RM4.77 Against Dollar: Kenanga

For the second time on record, the ringgit depreciated above the psychological level of 4.70 against the USD, mainly due to
increasing domestic political uncertainty following the dissolution of parliament.

Adding to the drag on the ringgit is the strong USD trend as the market ramped up Fed’s terminal rate pricing to 5.0% amid a solid US jobs report, Fed’s persistent hawkish message, and September’s hotter-than-expected US core inflation reading.

The local note may continue to trade above the 4.70 level against the USD as market sentiment may continue to favour the safe haven dollar. On the domestic front, heightened political uncertainty may continue to hurt the ringgit due to rising capital outflows. Additionally, the potential further depreciation of the yuan due to President Xi’s Taiwan unification pledge and reiteration on China’s zero-COVID stance is expected to push the USDMYR pair closer to its all-time high of 4.77.

Contrary to MYR’s bearish trend momentum, the ringgit is expected to appreciate by 0.44% for this week. From a technical perspective, the dollar is expected to take a breather, with an immediate support level observed at 4.668. On the other hand, a break above the 4.723 level is needed to confirm USD extended bullish bias.

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