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Saturday, January 30, 2010

Ringgit may break 3.38 resistance level

The ringgit is expected to rise against US dollar next week with Asian currencies lending support on positive economic signs in the region, dealers said.

"The ringgit will be well supported at the 3.40 level next week," said one of the dealers, who added that the ringgit may break the resistance level of 3.38 next week.

However, the dealer said that the fundamentals were still weak in the absence of strong leads.

"Any unfavourable news in the United States will downgrade the greenback's value in overseas markets, hence the ringgit is likely to ride on this weakness," he said.

Another dealer said the US Commerce Department will release its fourth-quarter gross domestic product (GDP) data on Friday and negative numbers will encourage investors to take positions on the US dollar.

He did not rule out the possibility of strong buying of US dollars if the data comes in much weaker than expected as most investors preferred to keep the greenback as a "safe haven" during economic crisis.

The local market will be closed on Monday for the Federal Territory Day public holiday.

On a week-to-week basis, the ringgit depreciated against the US dollar to 3.4060/4110 from 3.3940/3990 recorded last Friday.

The local currency declined against the Singapore dollar at 2.4256/4319 from 2.4203/4260 last Friday and was also weaker against the Japanese yen at 3.7748/7820 from 3.7586/7658 previously.

The ringgit, however, strengthened against the euro at 4.7602/7679 from 4.7978/8055 last Friday and also against the British pound at 5.5078/5173 from 5.5183/5281 previously. – BERNAMA

The Malaysian growth was not accidental. It was a result of the policies of the Government and the management of the economy and finances. National savings at 40% plus was the highest in the world and the reserves could sustain 4½ months of retained imports. The Ringgit was strong and steady - being valued at about... 2.5 to 1 USD for most of the time. - Tun Mahathir -

Note: This is a bad news.

7 comments:

  1. the general feel from most economics (research houses) in malaysia... caution...

    ReplyDelete
  2. zewt - elaborate? :)

    ReplyDelete
  3. when economy of the world destabilizes, usually investors will park their money in safe haven like USD or JPY, so all other currencies will drop in value. However, in malaysia case, its the fundamental flaw that drive many investors away.. i think MYR will have hard time to appreciate much for many years to come...

    ReplyDelete
  4. joe - i think they should freeze back.

    ReplyDelete
  5. freezing the currency is like to stop the investors from coming in. Anyway, malaysia needs to tackle its fundamental flaw in order to compete with regional investment hubs like Singapore, Indoneisa, Thailand, Vietnam. Otherwise, even Cambodia will surpass this country soon..

    ReplyDelete

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