Th ringgit has a taken a surprise leap in the stock market even though Malaysia is going through a lock down situation right now. Even though there was movement control imposed by the Malaysian government to control the spread of the virus the ringgit has rised0.27% against the USA Dollar.
FXTM market analyst Han Tan told theedgemarkets.com that “Once the immediate reaction fades and there’s more clarity of the domestic economic and political outlook, the ringgit is expected to resume its gains against the USD.”
This positive turn that the ringgit took amongst all this chaos was not expected by the financial world of Malaysia and it took of a significant amount of pressure of the country as they were expecting the worse with the imposed lock down and movement control.
It was stated by Axi chief global market strategist Stephen Innes that the general fade play here is that lockdowns are being viewed as a speed bump. Provided vaccine efficacy remains high during the worldwide roll-out; forex (foreign exchange) traders will still buy into currency weakness in Asia. There is no convincing reason to turn full throttle bearish on the ringgit (or Asean currencies) other than the lockdown while the global reflation trade still fires.”
The Kenanga Research had said that while this is a good thing and a positive outcome that the MCO and reimplementation of the curfew and lockdown has taken a hit on the foreign investors’ confidence to invest in Malaysia right now. This also means that the Ringgit may linger at these number for a long time before any more major improvements are seen.
The research also needed by saying that they “Nevertheless, we still maintain our USD-MYR (ringgit) year-end forecast of 3.95 on the back of effective vaccine roll-outs, higher Brent crude oil prices and broad USD weakness.”
