The ringgit appreciated around 1.3% WoW (as of 24th November) against the USD as the USD index (DXY) slipped below the 106 llevel buoyed by signals from the FOMC minutes that the US Fed may slow the pace of interest rate hike. In addition, the ringgit was also boosted by hopes of China’s stimulus and optimism from the breakthrough of post GE15 deadlock following the appointment of Datuk Seri Anwar Ibrahim as the 10th Prime Minister of Malaysia.
The direction of the local note for next week would continue to be influenced by the optimism of the new unity government and its to-be-announced cabinet lineup. This will also be supported by the optimism of China’s new stimulus measures and less hawkish Fed minutes. Nevertheless, the DXY may continue to hover around the 106 level due to diminishing dovish pivot expectations as well as fears of the global recession.
The USDMYR outlook is expected to be bullish next week, trading near its 5-day EMA of 4.531 as the pair’s RSI oversold at below 20.0. From a technical view, the ringgit is expected to reverse its gains and trade around the 4.553 level. Conversely, if the ringgit continues to appreciate and break the 4.467 level, the pair might rally further to the 4.439
