At 9.04 am(0104gmt), the local note was traded at 4.2950/3000 against the greenback from 4.2970/3000 last Friday.
KUALA LUMPUR: Standard Chartered recommends selling USD/MYR via three-month onshore deliverable forwards with spot target of 4.00 and stop-loss of 4.36, according to Bloomberg citing a report by strategist Divya Devash.
According to the report, the ringgit remains among the most undervalued emerging market FX based on a real effective exchange rate that is well below historical average and still close to 1997 levels.
Foreign investors’ overall positioning remains extremely light in the historical context, and the ringgit also benefits from Malaysia’s strong linkage in the global supply chain amid robust global export volumes, it says.
Ringgit sentiment onshore has improved with better US Dollar supply dynamics; onshore FX turnover is well off its late-2015 lows and onshore foreign currency deposits have turned a corner.
The strong pace of H1 growth increases risk of a pick-up in core inflation, and if growth continues to surprise on the upside, expectations for a rate hike may build up.
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