BNM policy normalization should favor the ringgit - Analyst

BNM policy normalization should favor the ringgit - Analyst
Analyst: Both the USD and the JPY are still dominating the FX market. - File Photo
KUALA LUMPUR: The ringgit is expected to strengthen against major currencies following Bank Negara Malaysia (BNM)'s policy normalization, says foreign currency analyst Stephen Innes of Oanda in a research note from Singapore on Wednesday morning.

In the note, Innes says that "with the markets focus shifting to BNM policy normalization, this should favour the ringgit given the anticipated policy shift at the end of the month"
He however cautioned the market that this will however require a number of other contingencies and external factors as well.

"But to get through the 6.95% level before the BNM rate hike, it will require either an extension of the Euro rally to break through 1.23 (against the USD) or for the USD-Japanese Yen forex pair to fall convincingly below the 111.00 mark," stressed Innes.

There is also the reminder that both the US Dollar and the Japanese Yen are still dominating the forex market currently. Innes says that "both currency pairs are steering FX markets right now".

At 9am Wednesday, the local note opened at 3.9566/9568 against the greenback from 3.9540/9580 on Tuesday.