KUALA LUMPUR, Sept 26 ― The ringgit is poised to break above the month-to-date high of 4.1757 against the US dollar as it makes its way towards its 50-day moving average (MA), which currently resides around the 4.19 mark.
FXTM market analyst Han Tan said the currency pair’s 50-day MA had not been truly tested as a resistance level since early June when it gave up its role as a key support level, but heightened political uncertainty or risk aversion might just do the trick.
“However, the 4.10 psychological level could come back into focus over the near term should the cloud of political concerns dissipate and investors’ risk appetite can make up lost ground,” he told Bernama.
Tan said market participants were expected to pay close attention to the first US presidential TV debate between President Donald Trump and Democratic challenger Joe Biden.
With the November elections set to be one of the most fraught battles for the White House in many a year, it would be imperative for investors to try and get a grasp of potential outcomes as early as possible.
“However, better-than-expected data out of the Chinese economy over the coming days, along with an increase in the likelihood of the next round of the US fiscal stimulus being passed sooner rather than later, could help risk appetite punch through the political and economic woes that permeate investor sentiment,” he added.
Commenting on the ringgit’s performance for this week, Tan said the ringgit set a new seven-month low against the greenback, only to reverse course during the week as several factors weighed on the ringgit’s fortunes.
“The greenback’s rebound and the expected technical pullback in the local unit occurred amid a spike in domestic political uncertainty, which together contributed to a weekly decline of over one per cent for the Malaysian currency, while Asian currencies collectively gave up ground against the US dollar,” he said.
He noted that FTSE Russell’s decision to keep Malaysian bonds on its watch list, however, would maintain a key overhang over the ringgit for months to come.
On a Friday-to-Friday basis, the ringgit eased against the US dollar to 4.1650/1700 from 4.1100/1150 in the previous week.
The ringgit traded higher against the Singapore dollar to 3.0264/0307 from 3.0299/0347 last Friday but fell versus the yen to 3.9490/9549 from 3.9398/9450 previously.
The local unit advanced vis-a-vis the British pound to 5.3008/3088 from 5.3340/3421 and climbed against the euro to 4.8489/8564 from 4.8712/8787. ― Bernama
