| The above graph is line chart of USDMYR from September 2015 till date.Malaysias ringgit has rallied more than 7% this year and strengthened beyond 4.00 levels against the dollar last week for the first time since August 2015. Local currency headed towards biggest monthly rally since 1998 on the back of stabilizes oil prices along with rising inflow in the country. The purchase of 1MBD energy asset by Chinas state owned China General Nuclear Power Corporation for RM9.83bil in cash also supported the ringgit. The pair made low of 3.95 levels last week, before paring its gains as greenback climb on sign of positive economic data. A rally in global oil prices from multi-year low is supporting the local currency as Malaysia is a net oil exporter in Asia. FII inflow also increased in last two months, a reversing from being a net seller last year. Investors are looking for better return in the Malaysia coupled with negative interest rate in the EU and Japan. FII ownership in government bonds has risen up to 47.9% in January 2016 from a low of 45.6% in September in 2015.The pair slightly moved up from near term support of 3.95 levels. But it is still trading below short and medium term moving averages i.e. resistance. If prices break this levels, it can further slid towards next support of 3.84 levels. On the higher side, it is looking major resistance of 4.07 levels. Going ahead, further sustained recovery in crude oil prices will likely continue to benefit the ringgit. |
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