The Malaysian Ringgit (MYR) experienced weakness during Thursday’s Asian session, driven by a stronger US Dollar and higher US Treasury yields following the Federal Open Market Committee (FOMC) meeting, according to Christopher Wong at OCBC. During this period, the USD/MYR currency pair briefly traded above 4.10 in what was described as an orderly move, with no significant signs of Malaysia-specific financial stress [1].
Some of the pressure on the Ringgit eased overnight as both the US Dollar and US Treasury yields retreated from their highs, and oil prices also pulled back. Wong notes that in the near term, the MYR may continue to trade cautiously if US yields and the Dollar rise again. However, he sees potential for a reversal of the recent weakness as post-Fed market moves settle, citing broadly supportive domestic fundamentals for Malaysia [1].
Technical analysis indicates that while bullish momentum for USD/MYR remains intact, the Relative Strength Index (RSI) has entered overbought territory. Wong suggests that a lack of further upside could see USD/MYR turn lower and close the earlier post-holiday gap. Key technical levels are identified with support at 4.0870 and 4.0730 (the 50-day moving average), and resistance at 4.10 and 4.12 [1].
No Malaysia-specific market stress was observed, and the overall tone suggests cautious optimism for the Ringgit should external pressures subside [1].
CONCLUSION
The Malaysian Ringgit's recent weakness is attributed to external factors, particularly a stronger US Dollar and higher US Treasury yields post-FOMC. While near-term caution is warranted, OCBC sees potential for a reversal as market conditions stabilize and domestic fundamentals remain supportive.