The Malaysian ringgit like the other emerging Asian currencies continued to fall today as the U. S. Congress failed to pass the $700 rescue plan for the financial institutions and the global volatility rose on the deeper crisis expectations.
The Malaysian currency is currently heading for the second month of decline versus the U.S. dollar as the Asian stock markets follow the general trend of the developed economies and decline spurring the risk aversion and moving out the investors assets out of the emerging economies. Assets sold for ringgits increase the supply of the national currency and push it down against the dollar.
Currency analysts say that the current trend will prevail for now. At least, the next week well see another round of weakening of the emerging currencies. Investors will stick to the risk aversion and wont be buying assets (and thus currencies) in countries with elevated risk outlooks. Looks like no one wants to fall a victim of the new Asian crisis.
Ringgit shows an interesting daily dynamics on the Forex market — it was growing almost every trading session intraday during the last 6 days, but each day it was opening with a rather large downward gap — thus its falling day-to-day. The reason behind such behavior lies in the relation between Malaysian and U.S. timezones, which offers optimism during their trading session, but traders get disappointed at the beginning of the trading session after the U.S. daily negative news.
USD/MYR fell today from 3.4525 to 3.4355 as of 7:37 GMT today, but it opened higher than the yesterdays close rate 3.4475. Its quite likely that the USD/MYR will open with a wide positive gap tomorrow too.
If you have any questions, comments or opinions regarding the Malaysian Ringgit,
feel free to post them using the commentary form below.