Ringgit hits 18-month high, edges towards RM3.75 against US dollar

Malaysian ringgit notes among US dollar bills, photo illustration taken in Singapore, August 24, 2015. www.reuters.com
Malaysian ringgit notes among US dollar bills, photo illustration taken in Singapore, August 24, 2015. www.reuters.com

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KUALA LUMPUR, Jan 15 — The ringgit rose to an 18-month high as the US dollar weakened after the weekend, showing Malaysia’s economy to be on the upswing.

The ringgit traded at 3.956 against the greenback at the close of markets here at 5pm today.

“The ringgit might strengthen to 3.80 displaying a similar pattern as in 2015,” Pong Teng Siew, head of research at Inter Pacific Securities, told Malay Mail when contacted.

“However the ringgit is due for a pullback as it had advanced strongly in the past few weeks,” he added.

Malaysia’s industrial production rose to a bigger-than-expected 5 per cent last November, year-on-year, the fastest in three months, according to data released last week.

The ringgit may head toward 3.75 after breaching key technical level of 3.98, head of trading for Asia Pacific at Oanda in Singapore, Stephen Innes was quoted saying in a report by Bloomberg.

He added that the ringgit is expected to benefit from higher energy prices and foreign direct investments from China’s Belt and Road initiative.

The ringgit may strengthen toward 3.95 and 3.9350 as Malaysia’s general election approaches and domestic fundamentals remain strong, Maybank analysts led by Saktiandi Supaat wrote in a note today.

Higher commodity prices will benefit the ringgit but the currency’s outlook is clouded by political uncertainties, investor Jim Rogers said in a separate Bloomberg report.

UBS Asset Management said it has cut its long positions on the ringgit, Thai baht, Singapore dollar and Chinese yuan, although the Malaysian and Thai currencies remain attractive in the long-term as the respective economies are doing well.

Malaysia’s 10-year yield fell 3 basis points last week to 3.84 per cent, the lowest since September 2017.

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