Every Malaysian's Nightmare | The MYR Slips Further

The MYR continued to fall against the US dollar, breaking through the all-time low set during the Asian Financial Crisis (AFC) in 1998. At 9 a.m. on 21st October 2022, the Malaysian ringgit had depreciated by 75 basis points against the US dollar to 4.7345/7360 from yesterday's close of 4.7270/7290.

This further fall was believed to be exacerbated by global market uncertainties. According to dealers, a lack of market-moving catalysts and a stronger greenback due to higher US Treasury yields and falling crude oil prices dragged down the MYR's performance.

On the other hand, according to ActivTrades trader Dyogenes Rodrigues Diniz, the US dollar has strengthened due to the US initial jobless claims data, which showed a lower-than-expected reading of 214,000 versus a forecast of 230,000. He also stated that existing home sales in the United States were higher than expected, indicating that the US housing market is also strong. He further explained that these two indicators simultaneously point towards a potentially positive economic outlook for the United States, which suggests more scope for Fed interventions in containing inflation, which is currently accelerating at its fastest rate in 4 decades. Thus, contributing the rapid decline of MYR against the US dollar.

The SPI Asset Management managing director Stephen Innes asserted that the ringgit continued to fall as US bond yields rose due to the Federal Reserve's (Fed) hawkish stance.

Despite the headline that Chinese officials are debating reducing inbound COVID-19 quarantine, the ringgit has received little relief versus the US dollar.

However, according to Innes, the MYR is not the only currency that has weakened. On Thursday, the Japanese yen, one of the world's strongest currencies, broke through the 150 mark and hit a 32-year low against the US dollar.