I was expecting the ringgit to consolidate last week but the ringgit has been gaining momentum and hitting the strong levels seen in 2008 during early of the week.
Dealers said apart from riding market expectations of gains for the yuan, the ringgit was boosted by market talk that China was considering promoting the ringgit as a currency for direct Sino-Malaysian trade. China was also reported of planning to allow its currency yuan to trade against the Russian ruble and South Korean won to promote its use in cross-border trade. Currently, yuan can be traded with the dollar, the euro, the yen, the Hong Kong dollar and the British pound.
Will the ringgit hit the 3.1280 level reached in 2008 ?
On the 4 HTF chart, The USDMYR has breached the support lower channel line with indicators showing an oversold position.
By the last day of the week, USDMYR has moved below the support level at 3.1910. With the yuan had a major influence on the ringgit and it seem that the Chinese has soften their stance for yuan appreciation, the USDMYR could drifted lower next week unless there is some economic factors that could boost up the USD.
