USD/MYR may trend higher

The recent strengthening of the US Dollar could be one of the factors depressing our stock market as well as other regional markets. This was first noted in May when the downtrend of USD/MYR was broken on the upside. The short correction that followed, took the shape of an ascending triangle. On August 7th, the USD/MYR broke to the upside of the ascending triangle, at the level of RM3.28/USD1. This signaled the continuation of the uptrend in US Dollar vis-a-vis the Ringgit.

A foreign fund, who is bearish on a particular market (or, merely neutral about that market), could choose to liquidate its position & park its funds in another markets or other classes of assets that it may hold a positive view. It is likely that our local bourse may fall into the category of markets that foreign funds viewed as bearish & therefore had suffered from their selling.


Chart: USD/MYR's weekly chart as at August 15th (source: Saxo Bank Datacentre, via Passion-Trading.com)