Fundamental Overview

• After a roller coaster week of Malaysia’s political power struggle, ringgit strengthened in an apparent response to BNM and FOMC interest rate cuts aimed to bolster the economy from COVID-19 outbreak. The abrupt US rate cut of 50 bps is seen spurring money flow from the US to Asian markets due to anticipation for better returns, consequently weakening the dollar.
• The ringgit is set to endure market turbulence this week amid evolving political situation and heightened risk of COVID-19 as number of cases rose significantly.

Technical Analysis

• EMA suggests that ringgit may lose ground against the greenback by 0.22%.
• The technical outlook for this week shifted towards a bullish USD trend, with an immediate resistance seen at 4.198, followed by 4.224. A downward bias could emerge, should the pair break below the 4.155 support level.

Source: Kenanga Research - 9 Mar 2020