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19-11-2024, 09:30 PM
MALAYSIA’S currency is on course for its worst month in more than nine years, as investors scale back on risk assets amid concerns over the US election. The ringgit is down more than 6 per cent against the US dollar in October, putting it on pace for its biggest monthly loss since August 2015. The ringgit traded at 4.39 per dollar on Wednesday (Oct 30).
The renewed strength in the dollar is battering Asian currencies, almost all of which have come under heavy pressure in October as traders reassess the pace of Federal Reserve interest rate cuts and avoid risky assets in the run-up to the US election.
But the ringgit is partly a victim of its own success: a 14 per cent appreciation against the dollar in the last quarter, which made it Asia’s best performer, ensured there was room for a correction this month, according to OCBC.
“The previous gain was significant; therefore there’s more room for corrective play,” said Christopher Wong, a currency strategist at OCBC in Singapore. “The ringgit’s sensitivity to the yuan and the yen is also one of the highest in the region, which helps explain why it is suffering more than the rest.”
The renewed strength in the dollar is battering Asian currencies, almost all of which have come under heavy pressure in October as traders reassess the pace of Federal Reserve interest rate cuts and avoid risky assets in the run-up to the US election.
But the ringgit is partly a victim of its own success: a 14 per cent appreciation against the dollar in the last quarter, which made it Asia’s best performer, ensured there was room for a correction this month, according to OCBC.
“The previous gain was significant; therefore there’s more room for corrective play,” said Christopher Wong, a currency strategist at OCBC in Singapore. “The ringgit’s sensitivity to the yuan and the yen is also one of the highest in the region, which helps explain why it is suffering more than the rest.”
