Thursday December 7, 2017
12:00 PM GMT+8

Advertisement

More stories

The ringgit has dropped for three straight days after surging to a 15-month high on Monday. — Reuters picThe ringgit has dropped for three straight days after surging to a 15-month high on Monday. — Reuters picKUALA LUMPUR, Dec 7 — After going from last to first in Asia, the Malaysian ringgit may be headed for a break — before resuming its rally.

Momentum indicators, including slow stochastics, show the ringgit is overbought. The currency has surged 3.6 per cent against the dollar in the past month, the best performer as oil prices climbed and the central bank signaled a potential interest-rate increase.

It was the worst-ranked emerging Asian currency in the same four-week period last year, as a crackdown on speculators and expectations of a stronger greenback spurred outflows.

“There’s potentially a bit more room to go, but if you look at the chart, perhaps it may need a bit of consolidation at some point,” said Ng Kheng Siang, Asia Pacific head of fixed income at State Street Global Advisors in Singapore, which oversees US$2.7 trillion.

“It’s a catch-up play. Last year there were quite a number of issues affecting Malaysia.”

The ringgit has dropped for three straight days after surging to a 15-month high on Monday. Overseas investors bought almost US$2 billion of Malaysia’s sovereign debt in September, the biggest inflow in four months.

“If you have some new money you may want to re-position in areas that haven’t done well but don’t look that bad,” Ng said. “That’s why we’ve seen a late surge in Malaysian assets.” — Bloomberg

Advertisement

MMO Instagram

Tweets by @themmailonline