Ringgit Stable Amid BNM Comments On FX Interventions

Spot USD/MYR has traded sideways for the bulk of today's session, while the BNM announced that it would intervene in the FX market to stem excessive movements in the ringgit exchange rate. The pair last deals at MYR4.6650, 100 pips shy of the previous close, due to a downswing in early Asia hours. Despite that downtick, spot USD/MYR remains in a well-defined uptrend.

• Technical conditions remain bullish, after the formation of a 50-DMA/200-DMA golden cross earlier this month, with spot USD/MYR rallying ~11% trough-to-peak this year. However, there are signs of waning momentum behind recent gains, with the RSI moving into overbought territory but struggling to print higher highs. Technically-oriented participants should monitor this space.
• The BNM's Financial Markets Committee (FMC) said in a statement that "the external environment continues to be the main driver of the ringgit’s performance," while "the recent depreciation of the ringgit is not reflective of Malaysia’s economic fundamentals." The BNM will thus step into the FX market to ensure better alignment of currency moves with the country's fundamentals.